PURPOSES OF VALUATION

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ONLINE BATCH STUDY MATERIAL-50 HRS EDUCATIONAL COURSE UNDER RULE 5(1) READ WITH RULE 12(2)(a) FOR REGISTRATION AS VALUERS UNDER THE BANNER OF CEV IAF RVO

UNIT-2

CHAPTER-3

PURPOSES OF VALUATION

Valuation is the technique of estimating and determining the fair price or value of a property such as a building, a factory or other engineering structures, plant & Machinery of various types, land etc. In real properties, there are various purposes for which valuation may be required.

It is essential to know exactly for what purpose the valuation is being prepared. Valuation is an art and professionals have to consider all pros and cons of the various factors affecting valuation. Broadly speaking, valuation may be required to be done for the following purposes.

Valuation is done for:
• Purchasing for Investment
• Purchasing for self-Occupation
• Revision of Capitals
• Interim Reports of Execution of Buildings or other structures.
• Compensation for land Acquisition
• Present Value of Old Properties
• Arbitration
• Assessing property Tax, Income Tax, Wealth Tax Gift Tax, Capital Gains
• Selling
• Mortgaging
• Collateral Security Auctioning
• Insurance
• Court fee stamp Partitions Stamp Duty
• Rent Fixation. etc.,

All the above purpose of valuation has been divided into six major categories; each category is discussed in detail.
1. Taxation
2. Finance
3. Industrialist
4. Statute
5. Personal planning
6. Social Responsibilities.
1. TAXATION
Valuation of property is required under various direct tax laws administered by the Central Board of Direct Taxes, Ministry of Finance. These include the Wealth Tax Act, Capital Gains Tax, etc. These valuations are normally required to be done under the particular act for a specific purpose as of a specific date.
a) Income Tax
Whether there is any Income Tax on Capital Gains Tax liability on business enterprise consequent to revaluation of assets.
b) Wealth Tax
Some years ago, wealth Tax was payable by all the assesses except Co-op. Societies, social club, political parties, specified mutual fund and non ……………………….READ MORE