KNOWLEDGE BANK FROM B KANAGA SABAPATHY 

LET KNOWLEDGE SPREAD

Message from B. Kanaga sabapathy 28.04.2023

Let us refresh our knowledge. RIGHT OR WRONG – 1

(Article by B. K. Aruna)

1. From FY 2017-18, the criteria of 36 months have been reduced to 24 months for short-term capital gain. This statement is _____.

2. When the property was acquired in 1972 and when it was sold on 01.04.2017, the FMV has to be ascertained as on 01.04.2001. This statement is _____.

3. Shifting base year from 1981 to 2001 is made for capital gain calculation. This amendment will take effect from AY 2018 -19. This statement is _____.

4. While computing capital gain, the expenses made for brokerage can be deducted from the sale price. This statement is _____.

5. While doing valuation for the purpose of cost of construction(excluding flat), the value of land is not to be included. This statement is _____.

6. Registered valuer under Companies act alone, cannot issue a report on cost of construction. This statement is _____.

7. A valuer can give a report on cost of construction for a building constructed on a land not legally owned by the assessee. This statement is _____.

8. The term super built up area holds good only when there is a common area. This statement is _____.

9. By adopting composite rate, we can value a commercial shop. This statement is _____.

10. Licence and lease are the same. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no.10 is the answer.

Message from B. Kanaga sabapathy 29.04.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 2

(Article by B.K. Aruna)

1. The Acts prevailing in the locality affect the market value of the property. This statement is _____.

2. Violations from the approved drawing will affect the loan amount to be sanctioned by the bank. This statement is _____.

3. A valuer must not issue a valuation report on market value without physical inspection of the property, even though it may be revaluation. This statement is _____.

4. With regard to the identification of a property for bank security purposes, it is the duty of the owner to identify his property, and it is the responsibility of the valuer to verify the identification with respect to the documents produced before him for perusal. This statement is _____.

5. Gift tax was abolished in 1998. Estate duty was abolished in 1985. Wealth tax was abolished in 2015. This statement is _____.

6. A valuation report is considered an ambassador of a valuer. This statement is _____.

7. Contractual rent and standard rent are not the same. This statement is _____.

8. While fixing fair rent for the disputed properties, the fair rent is to be ascertained as on the date of the petition in the court. This statement is _____.

9. The word depreciation is applicable to land also.This statement is _____.

10. While issuing a certificate on cost of construction, the valuer is normally pressurised to certify for a lower value. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no.9 is the answer.

Message from B. Kanaga sabapathy 30.04.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 3

(Article by B.K. Aruna)

1. The basis of valuation will depend upon the purpose for which valuation is required. This statement is _____.

2. Market value depends upon the factor – supply and demand. This statement is _____.

3. Money available for investment or accumulated wealth having the potential of generating income is called ‘capital’. This statement is _____.

4. The historical cost multiplied by cost index will be the estimated reproduction cost. This statement is _____.

5. The valuation report is useless if the exact purpose is not mentioned. This statement is _____.

6. Market approach is basically operating on the ‘principles of substitution’. This statement is _____.

7. Auction sale information can also be taken as a source of sale instances. This statement is _____.

8. Cost index does not change from place to place. This statement is _____.

9. Income approach is best suited for investment assets. This statement is _____.

10. Sale comparison method is suitable for marketable assets. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no.8 is the answer.

Message from B. Kanaga sabapathy 01.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 4

(Article by B.K. Aruna)

1. Cost inflation index and cost index are not one and the same. This statement is _____.

2. There is a standard prescribed and exclusive valuation format for capital gain purposes. This statement is _____.

3. The CII can be used in the reverse direction. This statement is _____.

4. When certifying the cost of construction of the building constructed 5 years back, depreciation is to be considered. This statement is _____.

5. A registered valuer under Companies Act and a registered valuer under CBDT are the same. This statement is _____.

6. While determining the cost of construction by accounting method, a rebate of 7.5% can be considered towards self-supervision. This statement is _____.

7. Nature of occupancy, tenure, town planning acts and rent control acts affect the cost. This statement is _____.

8. While fixing joint venture ratio, the promoter’s profit is to be considered. This statement is _____.

9. UDS of land alone in an apartment enjoys market value. This statement is _____.

10. The composite rate is Rs. 6,000/-. The building is 30 years old. Life is 60 years. Depreciated composite rate is 50% of Rs. 6,000/- i.e. Rs. 3,000/-. This statement is _____.

Answers :

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

ANSWER:- Sl.no.1 is the answer.

Message from B. Kanaga sabapathy 02.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 5

(Article by B.K. Aruna)

1. Higher the rate of capitalisation, higher the value of the asset. This statement is _____.

2. Guideline value does not play an important role while certifying market value for security purposes to banks. This statement is _____.

3. While calculating depreciation for any building for any purpose, the minimum % of depreciation to be applied is 10%. This statement is _____.

4. Perusal of title deed and legal opinion is not necessary while doing valuation of collateral security to bank. This statement is _____.

5. In apartment valuation, common area % = total common area divided by sum of the super built up area of all flats. This statement is _____.

6. Mr. X has obtained drawing approval for an FSI of 1.5, whereas he has actually constructed a building for an FSI of 3.0. The valuer must consider this as a serious violation when he prepares the valuation report for cost of construction. This statement is _____.

7. Landlocked land principles are applicable to agricultural lands also. This statement is _____.

8. Procedure of fixing guideline rates is uniform in all States. This statement is _____.

9. Standard rent and fair rent are one and the same. This statement is _____.

10. Procedure of fixation of fair rent is the same for all States. This statement is _____.

Answers :

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

ANSWER:- Sl.no.2 is the answer.

Message from B. Kanaga sabapathy 03.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 6

(Article by B.K. Aruna)

1. Historic cost and original cost conveys the same meaning. This statement is _____.

2. Reinstatement value and replacement value are the same. This statement is _____.

3. NPA means Non-Performing Asset. This statement is _____.

4. The cost can vary with the method of valuation. This statement is _____.

5. With FSI as 2, the value of a new residential flat is estimated by composite rate method and also by land and building method. The second method will give a higher value. This statement is _____.

6. The term written down value holds good for land also. This statement is _____.

7. The value of land is separately assessed, and to this, the value of the building is added. This method is called composite rate method. This statement is _____.

8. Urban land ceiling act exists now. This statement is _____.

9. A plot with less frontage and large depth enjoys a higher value than a plot with large frontage and smaller depth. This statement is _____.

10. Valuation cell officers are the staff recruited by the Income Tax Department. This statement is _____.

Answers :

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

ANSWER:- Sl.no.3 is the answer.

Message from B. Kanaga sabapathy 04.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 7

(Article by B.K. Aruna)

1. Tangible assets do not include shares, stocks and debentures. This statement is _____.

2. A lease is the outcome of the rightful separation of ownership and possession. This statement is _____.

3. In a lease, the lessee cannot sell the property, whereas he can sublet if the agreement permits. This statement is _____.

4. In a lease, the improved rent is Rs.7800, whereas the head rent is Rs.5800. Therefore, the profit rent is Rs.2000. This statement is _____.

5. The formula for SI – I = P x N x R, where P – principal amount, N – number of years, R – rate of interest and I – simple interest. This statement is _____.

6. Lease requires registration as per the Transfer of Property Act 1882. This statement is _____.

7. While doing a valuation of a property by rent capitalisation method, the value of land by adopting a suitable market rate is to be added. This statement is _____.

8. When a piece of land abutting any highway is to be valued for collateral security purposes, the important aspect to be seen by the valuer is – whether there will be any possibility for the government to acquire the subject land for the purpose of widening the road in future. This statement is _____.

9. The area of an odd-shaped plot can be calculated by the heron’s formula. This statement is _____.

10. The term plinth area cannot be used for all the floors in a building. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no.7 is the answer.

Message from B. Kanaga sabapathy 05.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 8

(Article by B.K. Aruna)

1. For the purpose of calculating depreciation, normally, a valuer assumes only the economic life as the life of the building. This statement is _____.

2. Periodical maintenance of a building increases the physical life of the building. This statement is _____.

3. It is the duty of a panel valuer to defend his valuation report when questioned. This statement is _____.

4. The certified value for a single property need not be the same for all the valuations meant for banks. This statement is _____.

5. Marketable title is a title that is legally valid, and it is free from encumbrance. This statement is _____.

6. While certifying the value of a property with a defective title deed, a suitable deduction is not to be made. This statement is _____.

7. The basis of valuation will depend upon the purpose for which valuation is required. This statement is _____.

8. A valuer is not responsible for any defect in the title deeds. This statement is _____.

9. Value is a word with many meanings. This statement is _____.

10. In belting method of valuation, the depth of the first belt ‘D’ is called standard depth. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no.6 is the answer.

Message from B. Kanaga sabapathy 06.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 9

(Article by B.K. Aruna)

1. WILL has to be signed by two witnesses compulsorily. This statement is _____.

2. When compared to tenanted property, self-occupied properties, in general, enjoy a better value. This statement is _____.

3. Gold and real estate are the sources where black money is not only concealed but also generated. This statement is _____.

4. Capitalising the net income is the basis for profit method. This statement is _____.

5. In rental valuation method, a valuer gives more importance to violations with respect to the approved drawings. This statement is _____.

6. Rent capitalisation method is a better method to value a fully tenanted property. This statement is _____.

7. Under income approach,the landlord is called a lessor. The tenant is called a lessee. This statement is _____.

8. Years purchase = 100 divided by rate of return. This statement is _____.

9. The gilt-edged securities were backed by the Government of India. This statement is _____.

10. The index prescribed by CPWD periodically is generally called as building cost index. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no-5 is the answer.  

Message from B. Kanaga sabapathy 07.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 10

(Article by B.K. Aruna)

1. Rental method, yield method and return on investment method are different from each other. This statement is _____.

2. Discounted cash flow DCF technique is a part of market approach. This statement is _____.

3. In the case of industries which earn low profits, profit method of valuation is suitable. This statement is _____.

4. The book value of a land do not escalate. This statement is _____.

5. Due to passage of time, cost either increases or decreases. This statement is _____.

6. Sale proceeds minus indexed cost of acquisition minus indexed cost of improvement is called as capital loss. This statement is _____.

7. A transaction between relatives known to each other is called an arm’s length transaction. This statement is _____.

8. A flat on the top floor always fetches a lower value. This statement is _____.

9. Lessor is the one who has the right to occupy the property under a lease agreement. This statement is _____.

10. Cost inflation index changes from place to place. This statement is _____.

Answers :

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

ANSWER:- Sl.no-4 is the answer.  

Message from B. Kanaga sabapathy 08.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 11

(Article by B.K. Aruna)

1. Obsolescence is a rise in value due to new inventions, changes in design or demand, improved methods of production etc. This statement is _____.

2. Price is an estimate, while value is a fact. This statement is _____.

3. Excessive usage of buildings decreases wear and tear. This statement is _____.

4. The property was originally acquired in 1969.It was sold on 01.04.2017. The cutoff date to ascertain the FMV is 01.04.1981. This statement is _____.

5. Book value is an accounting term. This statement is _____.

6. Book value of land changes every year. This statement is _____.

7. Salvage value and scrap value are one and the same. This statement is _____.

8 In a steel fabricated industrial shed, the salvage value may be considered as less than 10%. This statement is _____.

9. That Transfer of Property Act 1882 is an act enacted by the State and not the centre. This statement is _____.

10. Belting method of valuation can be adopted for land having more width and less depth. This statement is _____.

Answers :

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

ANSWER:- Sl.no-5 is the answer.  

Message from B. Kanaga sabapathy 09.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 12

(Article by B.K. Aruna)

1. Circle rate value and guideline value convey different meanings in general. This statement is _____.

2. A lease is coming under easement right. This statement is _____.

3. Immovable property includes standing timber and growing crops. This statement is _____.

4. Rent capitalisation method is ideal for owner-occupied property. This statement is _____.

5. Factory buildings are generally considered as the best security for mortgage purposes. This statement is _____.

6. Capital gain is the gain arising from the transfer of property. This statement is _____.

7. The process of preparing a valuation report usually starts before the valuation is started. This statement is _____.

8. The cost of first floor is always less than the cost of ground floor with the different specifications. This statement is _____.

9. All the ready made valuation formats are foolproof and best suited for all types of properties. This statement is _____.

10. Gross rent = net rent – outgoings. This statement is _____.

Answers :

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

ANSWER:- Sl.no-6 is the answer.  

Message from B. Kanaga sabapathy 10.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 13

(Article by B.K. Aruna)

1. A valuer can do valuation of land and building as well as plant and machinery if he is qualified both in Civil and Mechanical Engineering. This statement is _____.

2. A panel valuer is not considered as an employee of the bank. This statement is _____.

3. The procedure of valuation for mortgage purposes and cost of construction is different. This statement is _____.

4. Economic factors, physical factors, social factors and legal factors do not influence the market value. This statement is _____.

5. A residential house cannot be valued by profit method. This statement is _____.

6. The reasonable market value of properties like hotels, cinemas, restaurants, and recreation clubs depends mainly on their earning capacity. This statement is _____.

7. The purpose of fire insurance is to reinstate the damaged or destroyed properties to its former condition. This statement is _____.

8. Yield rate on investment depends on the location of the property. This statement is _____.

9. Building lease is the lease of land on a ground rent for a long term granted for the purpose of the erection of a building. This statement is _____.

10. Ground rent is said to be ‘secured’ when the land is developed with a well-erected building. This statement is _____.

Answers :

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

ANSWER:- Sl.no-4 is the answer.  

Message from B. Kanaga sabapathy 11.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 14

(An article by B.K. Aruna)

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

1. The date of valuation is very important because any incidents that have taken place after this date are not considered as admissible evidence for estimating the market value of a property as on the date of valuation. This statement is _____.

2. In the case of sub-lease, if the proposed rent is higher than the original (head) rent, then it is known as improved rent. This statement is _____.

3. Valuation procedure for freehold property and a leasehold property of long lease is the same. This statement is _____.

4. Age-related depreciation occurs solely because of wear and tear due to age of assets. This statement is _____.

5. When compared to the other methods of estimating the cost of construction, the detailed estimate is considered as the better accurate method. This statement is _____.

6. Freehold interest is the highest form of right associated with real estate. This statement is _____.

7. The amount of money necessary to produce an asset is called as cost. This statement is _____.

8. While estimating the market value of a property, road frontage plays an important role. This statement is _____.

9. Hotels, nursing homes and petrol bunks are all called as trade-related properties (TRP). This statement is _____.

10. In order to have a capitalised value, a lease must be capable of earning a profit rent. This statement is _____.

ANSWER:- Sl.no-3 is the answer.  

Message from B. Kanaga sabapathy 12.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 15

(An article by B.K. Aruna)

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

1. The stamp duty value is considered as the full value of consideration. This is section 50C of Income Tax Act. This statement is _____.

2. The scope of a registered valuer is to ascertain the fair market value of the property as on 01.04.1981 or 01.04.2001, and it is the job of an advocate to calculate the capital gain tax. This statement is _____.

3. The lessee loses his title to the property as soon as the lease expires. This statement is _____.

4. Valuation is a matter of opinion only. This statement is _____.

5. Before undertaking any valuation assignment, it is always better to obtain a written request from the party stating clearly the exact purpose of valuation. This statement is _____.

6. The investment value is Rs. 1 crore. The rate of return is 5%. The annual net income is Rs. 5,00,000/-. This statement is _____.

7. The age of the building is 10 years; life is 60 years; salvage value is 10%. The depreciation percentage by straight-line method is 15%. This statement is _____.

8. When the foundation is the same for GF and FF, the depreciation of FF is linked with the depreciation of GF in general. This statement is _____.

9. When compared to the yield rate available for long-term investment in government securities, the return on investment in real estate is considered as higher. This statement is _____.

10. While estimating the value of a property by land and building method (cost approach), apart from considering the depreciation for wear and tear, the obsolescence is also to be considered. This statement is _____.

ANSWER:- Sl.no-2 is the answer.  

Message from B. Kanaga sabapathy 13.05.2023

LET US REFRESH OUR KNOWLEDGE

RIGHT OR WRONG? – 16

(An article by B.K. Aruna)

For 9 questions, the answer is “Right”.
For one question, the answer is wrong. What is the SI.no. ?

1. A valuer who is employed as a Principal in an engineering college is eligible to become a registered valuer under Black Money Act. This statement is _____.

2. Capital gains are literally a tax on unearned increment to the property by market forces and not by the endeavour of the investor. This statement is _____.

3. The difference between forced sale value and orderly liquidation value is due to the urgency under which the property is sold. This statement is _____.

4. The plinth area and carpet area are to be calculated as per the revised standard IS 3861 – 2002. This statement is _____.

5. A lease has been defined in Section 105 of the transfer of property act. This statement is _____.

6. Section 50C is a special provision intended to deal with the problems of undervaluation with special rule for adoption of statutory value in the place of the apparent consideration specified in the document. This statement is _____.

7. An effluent treatment plant cannot be considered as a marketable property. This statement is _____.

8. To prevent undervaluation, valuation cell was formed in the year 1968 to assist the Income Tax Department. This statement is _____.

9. Mr. X is the chairman of a company. As the chairman, he can grant lease to Mr. X as an individual. This statement is _____.

10. Joint venture is mostly applicable for apartment projects. This statement is _____.

ANSWER:- Sl.no-1 is the answer.

Message from B. Kanaga sabapathy 14.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 17

(An article by B.K. Aruna)

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

1. A ‘deposit’ is an amount which is non-returnable. This statement is _____.

2. Retaining the open land by the lessee even after the lease period is called reversion. This statement is _____.

3. Lease for life is common in India. This statement is _____.

4. The sublease can be granted for a period which is more than the original lease period. This statement is _____.

5. YP is yield purchase which is the multiplier needed for capitalisation of the net income. This statement is _____.

6. ARY is known as All Risk Year. This statement is _____.

7. In constant percentage method of calculating depreciation, a valuer does not consider the salvage value. This statement is _____.

8. The owner of a freehold property has only limited rights with his property. This statement is _____.

9. A difference of 30 to 40% between any two honest valuations is considered as reasonable. This statement is _____.

10. Even if revaluation is required by the banks for lending purposes, physical inspection is not a must. This statement is _____.

ANSWER:- Sl.no-7 is the answer.

Message from B. Kanaga sabapathy 15.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 18

(An article by B.K. Aruna)

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

1. Cost of land and cost of building constitutes the market value of the property. This statement is _____.

2. When compared to a triangular plot, a square-shaped plot may command a lower value. This statement is _____.

3. Procedure of valuation of mofussil and agricultural land is the same. This statement is_____.

4. A building has a width of 30 feet and a length of 120 feet. For valuation of this building, belting method can be adopted. This statement is _____.

5. Loss of value is technically known as appreciation. This statement is _____.

6. There are only two methods available to determine depreciation. This statement is _____.

7. The end result will be the same if depreciation is determined by all the methods. This statement is _____.

8. Cost and value are different. This statement is _____.

9. While preparing the cost report for banks, the valuer has to consider depreciation. This statement is _____.

10. For different purpose of valuation for banks, a single valuation report is enough. This statement is _____.

ANSWER:- Sl.no-8 is the answer.

Message from B. Kanaga sabapathy 16.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 19

(An article by B.K. Aruna)

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

1. The salvage value of all thatched roof buildings is zero. This statement is _____.

2. For the purpose of housing loan, a panel valuer can certify for unauthorised construction. This statement is ______.

3. A valuation report issued for VISA purposes can also be taken as the report for collateral security to the bank. This statement is _____

4. Scrap value and salvage value are applicable to land also. This statement is _____.

5. A method may consist of many approaches. This statement is _____.

6. FSI = plot area divided by total built up area. This statement is _____.

7. A valuer of immovable property can do valuation of shares. The statement is _____.

8. According to an English Court judgement. the validity of a valuation report is 5 years. This statement is _____.

9. For a property owned by the father, his son can not issue a valuation report for taxation. This statement is _____.

10. The date of the report and the valuation date must be the same on all occasions. This statement is _____.

ANSWER:- Sl.no-9 is the answer.

Message from B. Kanaga sabapathy 17.05.2023

LET US REFRESH OUR KNOWLEDGE

WRONG OR RIGHT? – 20

(An article by B.K. Aruna)

For 9 questions, the answer is “Wrong”.
For one question, the answer is right. What is the SI.no. ?

1. A building constructed on a T – junction plot is a bad example for VISTA. This statement is _____.

2. The rent certified by CPWD is the standard rent. This statement is _____.

3. Methods and approaches are the same. The statement is _____.

4. In a lease, the terms “assignment” and “sublet” are the same. This statement is _____.

5. The undivided shares in a property are more attractive to a prudent purchaser. This statement is _____.

6. A building is having a width of 30 feet and the length is 120 feet. For valuation of this building, belting method can be adopted. This statement is _____.

7. While giving valuation for the purpose of cost of construction under Income Tax Act, value of land is to be done based on guideline rate. This statement is _____.

8. The construction works of a commercial building commenced in 2001 and completed in 2008. For the purpose of report on cost of construction, the plinth area rates as on 2008 are to be considered. This statement is _____.

9. A valuer can charge success fees from his client. This statement is _____.

10. SARFAESI Act was enacted in the year 2002. This statement is _____.

ANSWER:- Sl.no-10 is the answer.

Message from B. Kanaga sabapathy 18.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 1

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong?

1. Black money is the money on which tax is not paid to the government. This statement is ………..

2. Money lending without a proper license is also considered as an activity under Black Money. This statement is ………..

3. In the real estate sector, many people overvalue their real assets to refrain from paying the rightful tax. This is also an activity under Black Money. This statement is ………..

4. Black Money (undisclosed foreign income and assets) and Imposition of Tax Act was enacted by the Government of India in the year 2015. This statement is …….

5. The valuation of undisclosed assets will be done as per Rule 3 of Black Money and Imposition of Tax Rules, 2015. This statement is ……….

6. The definition of market value is the price that a unwilling purchaser would pay to a unwilling seller of a property, having due regard to its existing conditions, with all its existing advantages and its potential possibilities when laid out on its most advantageous manner. This statement is ………..

7. The proper application to become a registered valuer of Black Money Act need not be in Form no. 8 only. This statement is ………..

8. The application to become a valuer in Black Money Act should be submitted to the Chief Commissioner to the Income Tax department. This statement is ………..

9. The form no. 8 should be accompanied by a fees of Rs. 5,000/- and the major head is 0032 (Wealth Tax) and the minor head is 300 (Self Assessment Tax). This statement is ………..

10. Even if he is not a registered valuer under Wealth Tax Act, he can apply to become a registered valuer of Black Money Act. This statement is ………..

ANSWER:-ANSWERS for 18.5.23.

1 – R
2 – R
3 – W
4 – R
5 – R
6 – W
7 – W
8 – W
 9 – R
10 – W

Message from B. Kanaga sabapathy 19.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 2

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong?

1. A Black Money Act valuer is not eligible to do valuation for the purpose of estimating the cost of construction. This statement is ………..

2. Normally, a flat or an apartment conveys the same meaning. Flat is a British English and apartment is Amercian English. This statement is ……….

3. The words ‘lift’ and ‘elevator’ convey the same meaning. Lift is a British English and Elevator is Amercian English. This statement is ………..

4. Market value can be less than the cost. This statement is ………..

5. Market value can be more than the cost. This statement is ………..

6. Yield rate must be the same for all types of properties. This statement is ………..

7. Yield rate for a single property must be the same for all the period. This statement is ………..

8. Yield rate for the flat, house, commercial shop must be the same. This statement is ………..

9. Yield rate and rate of interest do not convey the same meaning. This statement is ………..

10. Value arrived at by the rent capitalisation method can always be certified as market value. This statement is ………..

* * *

ANSWER:-ANSWERS for 19.5.23

1 – W
2 – R
3 – R
4 – R
5 – R
6 – W
7 – W
8 – W
9 – R
10 – W

Message from B. Kanaga sabapathy 20.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 3

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. If a borrower applies loan for the construction of a new building, it is called collateral security. This statement is ………..

2. If a borrower pledges his some other property as a lean apart from the primary security, it is called collateral security. This statement is ………..

3. Procedure of valuation for primary security and collateral security is always the same. This statement is ………..

4. An agricultural land can be considered as collateral security. This statement is ………..

5. An aircraft and a ship are not SARFAESI compliant properties. This statement is ………..

6. Physical inspection is not a must even for revaluation. This statement is ………..

7. For primary security, perusal of approved drawing is a must. This statement is ………..

8. Verification of identification of the property is the responsibility of the panel valuer. This statement is ………..

9. For SARFAESI valuation, fixing the upset price is not in the scope of the valuer. This statement is ………..

10. For SARFAESI, value is to be estimated as per the approved drawing. This statement is ………..

ANSWER:-ANSWERS for 20.5.23 ….

1 – W
2 – R
3 – W
4 – W
5 – R
6 – W
7 – R
8 – R
9 – R
10 – W

Message from B. Kanaga sabapathy 21.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 4

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. Value of land and building plus promoter’s profit is the composite rate. This statement is ………..

2. A flat involves UDS of land. This statement is ………..

3. While valuing the depreciated value of a flat, depreciation should be considered for the land component and promoter’s profit also. This statement is ………..

4. When the age of the apartment building is more, the composite rate method can be applied effectively. This statement is ………..

5. If the sale deed of a flat does not involve any UDS of land, then the flat can be valued by land and building method. This statement is ………..

6. If the sale deed of a flat does not involve any UDS of land, then the right methods to estimate the market value are rent capitalisation method and sales comparison method. This statement is ………..

7. When the UDS of land is more and the super built up area (SBA) of the flat is less, the value arrived at by the composite rate method may not be realistic. This statement is ………..

8. UDS of land alone is marketable. This statement is ………..

9. When the life of the apartment building is over and if all the inmates decide to sell the property, then the sale proceeds will be normally apportioned with respect to the UDS of land. This statement is ………..

10. The insurance value of the flat against fire involves UDS of land also. This statement is ………..

ANSWER:-ANSWERS for 21.5.23 ….

1 – R
2 – R
3 – W
4 – W
5 – W
6 – R
7 – R
8 – W
9 – R
10 – W

Message from B. Kanaga sabapathy 22.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 5

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. A plot in a dead end street values less when compared to a plot on a thoroughfare street. This statement is ………..

2. Depreciation value arrived at by both methods viz. straight line method and constant percentage method will not be always same. This statement is ………..

3. Depreciation and depletion do not convey the same meaning. This statement is ………..

4. For a rented property, valuation can be done only by rent capitalisation method. This statement is ………..

5. When the property was sold on 31.03.2017, new cost indices with base 100 as on 2001 – 02 are to be used. This statement is ………..

6. The valuation procedure for estimating cost of construction and capital gains is not the same. This statement is ………..

7. To estimate the capital gains, accounting method cannot be adopted. This statement is ………..

8. Procedure of valuation to ascertain the short term capital gains and long term capital gains is same. This statement is ………..

9. While ascertaining the FMV as on 01.04.2001, it is the duty of the registered valuer to do the indexation also. This statement is ………..

10. When the property was acquired originally in the year 1987 and when it is sold in the year 2023, the FMV must be ascertained as on 01.04.1981. This statement is ………..

ANSWER:-ANSWERS for 22.05.2023.

1 – R
2 – R
3 – R
4 – W
5 – W
6 – R
7 – R
8 – W
9 – W
10 – W

Message from B. Kanaga sabapathy 23.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 6

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. The guideline rates for the land are fixed periodically by CBDT. This statement is ………..

2. The guideline value and stamp duty value are the same. This statement is ………..

3. The physical life of certain load bearing structures must be always assumed as 60 years only. This statement is ………..

4. The cost inflation for 2017 – 18 is 1185 as per the old cost indices. This statement is ………..

5. Cost index is prescribed by CPWD periodically. This statement is ………..

6. Cost inflation indices are prescribed by CBDT for every financial year. This statement is ………..

7. Cost index and cost inflation indices do not convey the same meaning. This statement is ………..

8. There can be a same cost inflation index for all the towns in the country for any financial year. This statement is ………..

9. Belting method cannot be applied to the valuation of agricultural lands. This statement is ………..

10. The cost of construction of a square shaped building will be more than a rectangular shaped building for the same area and the same specifications. This statement is ………..

ANSWER:-ANSWERS for 23.05.2023. 

1 – W
2 – W
3 – W
4 – W
5 – R
6 – R
7 – R
8 – R
9 – R
10 – W

Message from B. Kanaga sabapathy 24.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 7

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. Value of a residential property arrived at by land and building cannot be always certified as market value. This statement is ………..

2. Value of a cinema theatre arrived at by profit method can be automatically considered for certifying the market value. This statement is ………..

3. While estimating the value by profit method, the rate of capitalisation for all properties cannot be the same. This statement is ………..

4. While doing valuation by rent capitalisation method, the rate of capitalisation for a flat, shop and a mall must be the same. This statement is ………..

5. Marketability aspects also must be considered when doing valuation (for collateral security) by rent capitalistion method. This statement is ………..

6. Enforceability aspects need not be considered while doing valuation of a car parking alone, when the purpose is for collateral security. This statement is ………..

7. When profit method is used, marketability and enforceability aspects must also be considered if the purpose is for collateral security. This statement is ………..

8. For the purpose of estimating the cost of construction, marketability aspects are necessarily to be considered. This statement is ………..

9. While certifying the FMV for the purpose of collateral security, marketability and enforceability are necessarily to be analysed. This statement is ………..

10. While certifying the FMV to ascertain the capital gains, marketability and enforceability aspects are to be analysed. This statement is ………..

ANSWERS for 24.05.2023.

1 – R
2 – W
3 – R
4 – W
5 – R
6 – W
7 – R
8 – W
9 – R
10 – W

Message from B. Kanaga sabapathy 25.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 8

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. The report issued by a valuer is subjected to scrutiny at any point of later date. This statement is ………..

2. Value will be same for all the purposes. This statement is ………..

3. There is an absolute need for professional valuers to update their knowledge in the field of valuation. This statement is ………..

4. Any valuer can do any valuation of any asset. This statement is ………..

5. Honesty and integrity are the two eyes of a professional valuer. This statement is ………..

6. There can be only one format of valuation for all types of assets. This statement is ………..

7. Desktop valuation and kitchen top valuation denote the same meaning … i.e. doing the valuation without physical inspection of the property. This statement is ………..

8. There can be only one format of valuation, irrespective of the method of valuation. This statement is ………..

9. For any valuation assignment, the valuer should not proceed without knowing the exact purpose of valuation. This statement is ………..

10. While advancing loan to the borrowers, banks rely on the legal opinion of the panel valuer and valuation report of the panel advocate. This statement is ………..

ANSWERS for 25.05.2023.

1 – R
2 – W
3 – R
4 – W
5 – R
6 – W
7 – R
8 – W
9 – R
10 – W

Message from B. Kanaga sabapathy 26.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 9

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. For the purpose of valuation of collateral security, a panel valuer need not peruse the legal opinion. This statement is ………..

2. The first column of any valuation report is “What is the purpose of valuation?”. This statement is ………..

3. For any security valuation, identification of the property is the duty of the owner. This statement is ………..

4. Verification of identification of the property with reference to the documents given to him is the responsibility of the panel valuer. This statement is ………..

5. While certifying the market value of a flat, it is advisable to counter-check the value by rent capitalisation method. This statement is ………..

6. If the GLR is less than the PMR, it is advisable for the valuer to do valuation conservatively by adopting GLR. This statement is ………..

7. A valuer should not do over-valuation, but he can do undervaluation. This statement is ………..

8. When a valuer does a valuation of a property in a specific place, it is advisable not to rely totally on the legal opinion issued by an advocate from another State. This statement is ………..

9. A valuer cannot issue any number of valuation reports on the same day when the purposes are different. This statement is ………..

10. It is not the duty of the valuer to defend his valuation when questioned. This statement is ………..

ANSWERS for 26.05.2023.

1 – W
2 – R
3 – R
4 – R
5 – R
6 – W
7 – W
8 – R
9 – W
10 – W

Message from B. Kanaga sabapathy 27.05.2023

LET US REFRESH OUR KNOWLEDGE

WHICH IS RIGHT & WHICH IS WRONG? – 10

(An article by B.K. Aruna)

Here are 10 statements.
Identify which is correct and which is wrong.

1. In order to ascertain the capital gains, the date of sale is not the criteria. This statement is ………..

2. The assessee has to pay more capital gains if the FMV is less. This statement is ………..

3. In capital gain calculation, the FMV will be more if the depreciated value of the building is more. This statement is ………..

4. While ascertaining capital gains, determining the depreciation by adopting constant percentage method, in general, is advantageous to the assessee. This statement is ………..

5. While determining the FMV to ascertain capital gains, adopting CPWD plinth area rates, in general, is advantageous to the assessee. This statement is ………..

6. For cost of construction assignments, estimating the cost is not the sole purpose. This statement is ………..

7. Cost of construction can be estimated by adopting replacement value and deducting the depreciation value. This statement is ………..

8. While estimating the cost of construction, value of land is to be calculated based on GLR. This statement is ………..

9. To estimate the cost of complicated buildings and special buildings, detailed method is more accurate. This statement is ………..

10. In taxation assignments, the registered valuer’s report is likely to be scrutinized by the valuation cell. This statement is ………..

ANSWERS for 27.05.2023.

1 – W
2 – R
3 – W
4 – R
5 – R
6 – W
7 – W
8 – W
9 – R
10 – R

Message from B. Kanaga sabapathy 28.05.2023

LET US REFRESH OUR KNOWLEDGE

Dear fellow valuers,

From 28.04.2023 to 13.05.2023, there was a regular column “Right or Wrong?”. 10 statements were there out of which one was wrong. Many valuers are interested to know what is the corrected version for the wrong statements.

Here are the answers.

RIGHT OR WRONG? – 1 (28.04.2023)

10. Licence and lease are not the same.

RIGHT OR WRONG? – 2 (29.04.2023)

9. The word depreciation is not applicable to land.

RIGHT OR WRONG? – 3 (30.04.2023)

8. Cost index changes from place to place.

RIGHT OR WRONG? – 4 (04.05.2023)

7. While doing a valuation of a property by rent capitalisation method, the value of land is not to be added.

RIGHT OR WRONG? – 5 (05.05.2023)

6. While certifying the market value of a property with a defective title deed, a suitable deduction must be made.

RIGHT OR WRONG? – 6 (06.05.2023)

5. In rental valuation method, a valuer need not give importance to violations with respect to the approved drawings.

RIGHT OR WRONG? – 7 (10.05.2023)

4. Economic factors, physical factors, social factors and legal factors influence the market value.

RIGHT OR WRONG? – 8 (11.05.2023)

3. Valuation procedure for freehold property and a leasehold property of long lease is not the same.

RIGHT OR WRONG? – 9 (12.05.2023)

2. The scope of a registered valuer is to ascertain the fair market value of the property as on 01.04.1981 or 01.04.2001, and it is the job of the chartered accountant to calculate the capital gain tax.

RIGHT OR WRONG? – 10 (13.05.2023)

1. A valuer who is employed as a Principal in an engineering college is not eligible to become a registered valuer under Black Money Act.

 

 

With best wishes,

B. KANAGA SABAPATHY
bkvaluer@gmail.com
www.bkanagasabapathy.com

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