REGISTERED VALUERS UNDER THE INCOME-TAX RULES, 2026

A Comprehensive Overview of Section 514 and Rules 246, 247, 248, 249, 149 & 189

By- Babu G, Registered Valuer (IBBI & Income Tax) | Chartered Engineer

B.Tech (Civil), B.E. (ECE), M. Sc (Real Estate Valuation), M. Sc (Plant & Machinery)

Introduction

The profession of valuation in India has undergone a remarkable transformation — from an informal, experience-driven practice to a structured, examination-based, regulated profession. The enactment of the Income-Tax Rules, 2026, effective from 1st April 2026, marks the latest and most significant milestone in this journey.

This article traces the historical evolution of valuers in India, examines the existing regulatory frameworks under the Wealth-tax Act and IBBI, and provides a detailed analysis of the new Income-Tax Rules, 2026, specifically Rules 246, 247, 248, 249, 149, and 189 governing Registered Valuers under Section 514.

Part I: A Brief History of Valuers in India

Early Valuation Practice (Before 1961)

Before formal regulation, no unified legal framework governed the practice of valuation in India. Valuers were recognized largely on the basis of their experience and professional reputation. The closest thing to a formal valuation exercise arose under the Land Acquisition Act, 1894, where Collectors and Land Acquisition Officers determined the “Market Value” of land for compensation purposes. When property owners disagreed with the assessed value, disputes were referred to Civil Courts, where senior engineers and architects would testify as “Expert Witnesses.”

This era also saw the birth of two foundational valuation methodologies still in use today — the Belting Method (valuing land based on its distance from a main road) and the Comparison Method (deriving value from recent sale deeds of comparable properties in the same locality).

Revenue and Engineering — The “Pensioner” Era

Outside the legal arena, valuation was primarily a sideline activity for retired government officials. Agricultural land was assessed by retired Tahsildars, while buildings were evaluated by Public Works Department (PWD) Engineers. Reports were often brief, one-page documents with no standardized methodology. Valuers relied heavily on personal experience and the CPWD Schedule of Rates for estimating construction costs. In banking, even the Bank Manager would personally inspect properties or engage a local PWD-qualified engineer to certify the value of collateral.

The Wealth and Succession Era (Pre-1961)

Before the advent of modern income tax, valuation played a critical role in the administration of “Death Duties” and “Wealth Taxes.” The Estate Duty Act, 1953 was a significant precursor, requiring the valuation of all assets left by a deceased person and compelling the government to formally recognize Chartered Accountants (for shares and business assets) and Engineers (for property) as competent valuers.

The Wealth Tax Act, 1957 went a step further by introducing India’s first formal “Register of Valuers” under Section 34AB — the first time the government attached a license to the designation of a valuer.

From Art to Science

In the early years, valuation was regarded as an “art” based on the expert opinion of the valuer, with no obligation to follow prescribed formulas. It was only after the Income Tax Act, 1961 and the subsequent 1972 amendments to the Wealth Tax Rules that valuation started transitioning into a “science,” with prescribed mathematical methodologies such as the Rental Capitalization Method.

Part II: Registered Valuers Under Section 34AB of the Wealth-Tax Act, 1957

Section 34AB of the Wealth-Tax Act, 1957 remains a foundational legal pillar for Approved Valuers in India. Even after the formal abolition of Wealth Tax, this section continues to be referenced by the Income Tax Department, Banks, and the Judiciary for certifying valuation professionals.

Registration Framework

Under Section 34AB, any person wishing to practice as a Registered Valuer must apply to the Chief Commissioner or Director General of Income Tax. Registration is asset-specific — a valuer is registered for a particular class of asset (e.g., Immovable Property, Plant and Machinery), not as a general-purpose valuer. The government maintains a formal “Register of Valuers” for this purpose.

The Application Process (Rule 8A): The law evaluates not merely academic qualifications but the applicant’s “pedigree” in the profession.

Form N: The applicant must submit Form N with a detailed history of experience and a list of assets previously valued.
Fee: A registration fee of ₹1,000 is payable.
Verification: The Income Tax Department conducts an inquiry into the applicant’s “integrity and reputation,” which may include contacting references to confirm the applicant is a “fit and proper person.”

Duties of a Valuer Under Section 34AB

Once registered, a valuer is bound by the following legal obligations:

Impartiality: Must deliver a “true and fair” valuation, free from bias.
Conflict of Interest: Cannot value an asset in which they hold a direct or indirect interest.
Standardized Fees (Rule 8C): Fee charged for statutory reports is legally capped. The applicable scale is:
- First ₹5 Lakhs: 0.50%
- Next ₹10 Lakhs: 0.20%
- Next ₹40 Lakhs: 0.10%
- Balance: 0.05%
Form of Report: Valuation reports must conform to prescribed formats (e.g., Form O-1 for immovable property).

Removal and Misconduct (Section 34AD)

The Chief Commissioner of Income Tax holds the authority to remove a valuer from the register if the valuer has been convicted of an offence involving imprisonment, found guilty of professional misconduct (such as intentionally overvaluing property to facilitate tax evasion), or misrepresented facts to obtain registration.

Summary: Who Valued What? (Pre-1961)

Asset Type	Who Valued It	Legal Basis
Agricultural Land	Tahsildars / Revenue Officers	Land Revenue Codes
Buildings / Urban Land	PWD Engineers / Architects	Land Acquisition Act, 1894
Jewellery / Art	Traditional “Joharis”	Wealth Tax Act, 1957
Company Shares	Chartered Accountants	Companies Act, 1956

Role of Sec 34AB Valuers Under SARFAESI

The SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) empowers banks and financial institutions to auction residential or commercial properties of defaulting borrowers without court intervention. Section 34AB Registered Valuers are specifically mandated for valuations under SARFAESI proceedings and for high-value tax-related properties.

Part III: Professional Valuation Institutions in India

The valuation profession is supported by several professional bodies in India and internationally:

Indian Institutions:

Institution of Valuers
Council of Engineers & valuers (CEV)
Institution of Surveyors (Valuation Branch)
Institution of Government Approved Valuers
Practicing Valuers Association of India
Indian Institution of Valuers
Centre for Valuation Studies, Research and Training

International Institutions: 7. Royal Institution of Chartered Surveyors (RICS) — India Chapter 8. American Society of Appraisers — USA 9. Appraisal Institute — USA

Part IV: Registered Valuers Under IBBI (Companies Act, 2013)

The Insolvency and Bankruptcy Board of India (IBBI) governs valuation under the Companies (Registered Valuers and Valuation) Rules, 2017. This framework transformed valuation from an informal practice to a regulated, examination-based profession. The Registered Valuer (RV) framework under Section 247 of the Companies Act, 2013 made IBBI registration compulsory, completely overhauling the earlier “expert opinion” model.

The Three Pillars of IBBI Registration

To practice as a Registered Valuer under IBBI, an individual must satisfy three distinct requirements:

RVO Membership: Enroll with a Registered Valuers Organization (RVO) such as CEV IAF RVO, CVSRTA, ICAI RVO, ICSI RVO, or IOV-RVF, etc. The RVO acts as the primary regulator and provides a mandatory 50-hour educational course.
IBBI Examination: Pass the Valuation Examination for the specific asset class with a minimum score of 60%.
IBBI Registration: Apply to the IBBI for a formal Registration Number. Without this number, a valuation report carries no legal standing under the Companies Act or the Insolvency and Bankruptcy Code (IBC).

Part V: Income-Tax Rules, 2026 — Registered Valuers Under Section 514

Background and Notification

The Ministry of Finance, through CBDT, issued Notification No. G.S.R. 198(E) dated 20th March 2026, in exercise of powers conferred under Section 533 of the Income-Tax Act, 2025. Through this notification, the government introduced the Income-Tax Rules, 2026, which came into force on 1st April 2026. These Rules provide the procedural and regulatory framework governing Registered Valuers under the new income-tax regime.

Rules at a Glance

Rule	Subject
Rule 246	Application for registration as valuer under Section 514
Rule 247	Qualifications of Registered Valuers
Rule 248	Fee and valuation report under Section 514
Rule 249	Removal/restoration of valuers
Rule 149	Reference to registered valuer
Rule 189	Use of registered valuer in FMV determination

Rule 246 — Application for Registration as Valuer

Sub-rule (1): Applications for registration under Section 514(2) must be made in Form No. 169, verified as specified, and accompanied by a non-refundable fee of ₹10,000.

Sub-rule (2): Applications pending before authorities immediately before 1st April 2026 shall be treated as if filed under this Rule, with no additional fee required.

Sub-rule (3): If an applicant becomes ineligible due to the qualifications specified under Rule 247, the fee already paid shall be refunded upon application.

Sub-rule (4): Valuers already registered under the Wealth-Tax Act, 1957 with a valid certificate as on 31.03.2026 may continue their registration under Section 514. However, they are required to update their details by filing the application in Form No. 169 by 30.09.2026, with no additional fee required.

Sub-rule (6) & (7): Every Registered Valuer under Section 514 must qualify a prescribed examination within the period notified by the Central Government. Failure to do so will result in automatic cancellation of registration at the end of the specified period.

Summary of Rule 246

Sub-rule	Provision
(1)	Apply in Form No. 169 with ₹10,000 non-refundable fee
(2)	Pending pre-April 2026 applications treated as filed under this Rule
(3)	Fee refund if applicant becomes ineligible under Rule 247
(4)	Existing Wealth-tax Act valuers must continue to update by 30.09.2026
(5)	No fee is needed for such an update application
(6)	Must pass the prescribed examination after registration
(7)	Failure to pass leads to cancellation of registration

Rule 247 — Qualifications of Registered Valuers

Rule 247 prescribes asset-class-specific qualification requirements for registration.

The key classes are:

Class of Asset	Qualification / Experience Required
Immovable Property	Graduate in Civil Engineering / Architecture / Town Planning, or PG in Real Estate Valuation, or equivalent Govt-recognised qualification; plus 10 years of relevant service/teaching/practice (reduced to 3 years for PG in Valuation)
Agricultural Lands	Graduate in Agricultural Science with 5 years as a farm valuer, or retired Govt officer in specified land/Agri posts with 5 years aggregate service
Plantations	Owned/managed a plantation for 5 years with minimum area condition; or retired Govt officer with 5 years’ service, including 3 years in plantation areas
Forests	Retired/resigned Govt officer with 5 years in a gazette post requiring specialised forestry knowledge
Mines and Quarries	Graduate in Mining or equivalent Govt-recognised qualification; plus, retired/resigned employment with 10 years as a mining engineer
Stocks, Shares, Securities, Business Assets, Goodwill	CA/CMA/CS, MBA/PGDBM (Finance), or PG in Finance; plus 10 years relevant practice with receipt condition; or retired/resigned person with 10 years in audit/accounts/taxation or relevant valuation field
Machinery and Plant	Graduate/PG in specified engineering fields or valuation of Plant & Machinery, or equivalent Govt-recognised qualification; plus 10 years’ service/teaching/practice (reduced to 3 years for PG in valuation of machinery and plant in certain cases)
Jewellery	Sole proprietor/partner in Jewellery business for 5 years with specified turnover/profit threshold
Works of Art	Academic/professional specialisation in that art field, plus service in specified senior museum/archaeology/art positions
Life Interest, Reversions and Interest in Expectancy	Graduate plus 10 years of actuarial practice/service under the Insurance Act / Govt / LIC

Important General Points:

Employment Restriction: A person currently employed by the Government or another employer generally cannot qualify, except for Works of Art, Virtual Digital Assets, or other classes specifically notified by the Board.
Disqualifications: Include dismissal/removal from Government service, certain convictions/penalties, insolvency, imprisonment, professional misconduct, minority, unsound mind, and being an undischarged bankrupt.
Combined Experience: Different relevant periods of service/teaching/practice/experience can be combined to meet the 5-year or 10-year requirement.
Recognised University: Includes Indian universities established by law, UGC-recognised institutions, and certain equivalent foreign universities.

Rule 248 — Charging of Fee and Submission of Valuation Report

Rule 248 prescribes the maximum fees a Registered Valuer may charge for statutory valuation reports under Section 514:

Clause	Particulars	Fee
(a)	On the first ₹5,00,000 of the asset as valued	0.50% of the value
(b)	On the next ₹10,00,000 of the asset as valued	0.20% of the value
(c)	On the next ₹40,00,000 of the asset as valued	0.10% of the value
(d)	On the balance of the asset as valued	0.05% of the value

Key provisions:

Where two or more assets are to be valued for the same assessee, all assets are treated as a single asset for the purpose of fee calculation.
Where the calculated fee is less than ₹5,000, the valuer may charge a minimum of ₹5,000.
The valuation report under Section 514(3) must be submitted in Form No. 170.

Rule 249 — Removal from Register and Restoration

The Principal Chief Commissioner of Income-Tax, Chief Commissioner of Income-Tax, Principal Director General of Income-Tax, or Director General of Income-Tax may remove a valuer’s name from the register after giving a reasonable opportunity of being heard, on the following grounds:

The name was entered by error, misrepresentation, or suppression of a material fact.
The valuer has been convicted of any offence and sentenced to imprisonment, or has been found guilty of malpractice or professional misconduct that renders him unfit to remain in the register.

Key Provisions of Rule 249

Sub-rule	Meaning
(1)	Name can be removed for wrong entry, misrepresentation, suppression, conviction, malpractice, or misconduct
(2)	Name can be restored on application if sufficient cause is shown
(3)	Performance review of Registered Valuers is mandatory once every five years
(4)	The Authority or an Inquiry Officer can conduct inquiry proceedings with court-like powers

Rule 149 — Reference to Registered Valuer (Search and Seizure Proceedings)

Rule 149 governs the procedure for requisitioning expert valuation services under Section 247(5) and for making references under Section 247(9) during search and seizure operations.

Provision	Simple Meaning
Section 247(5)(b)	The authorised officer may requisition the services of a person or entity for assistance
Section 247(9)	The authorised officer may refer to a Valuation Officer, a person registered under Section 514, or other approved person/entity/registered valuer

How Rule 149 operates:

Step	Rule 149 Provision
Approval of person/ entity/ valuer	By PCCIT / CCIT / PDGIT / DGIT
Application form	Form No. 85
Time for disposal	Within 6 months from the end of the month of application
Use by authorized officer	Can requisition services or make reference to approved persons
Urgent case	Can use a non-approved person first, but must obtain approval within 30 days after recording reasons

Rule 189 — FMV Determination for Accreted Income

Rule 189 prescribes the method for computing the Fair Market Value (FMV) of assets and liabilities for the purposes of calculating accreted income under Section 352(2).

Main Concept:

Total Assets: Take the FMV of all assets appearing in the balance sheet.
Less: Tax paid and non-real/fictitious asset items such as unamortized deferred expenditure not representing actual assets.
Liabilities: Take the book value of liabilities, excluding corpus, reserves, contingent liabilities, unascertained liabilities, and excess tax provisions.

Part	What it Covers
Sub-rule (1)	Aggregate FMV of total assets
Sub-rule (2)(I)	Valuation of quoted/unquoted shares and securities
Sub-rule (2)(II)	Valuation of immovable property
Sub-rule (2)(III)	Valuation of business undertaking
Sub-rule (2)(IV)	Valuation of other assets
Sub-rule (3)	What liabilities are excluded
Sub-rule (4)	Definitions

Part VI: How to Become a Registered Valuer Under the New Regime

Under the Income-Tax Act, 2025 and Income-Tax Rules, 2026, the process for becoming a Registered Valuer is as follows:

Step	Action Required
1	Check eligibility as per Rule 247 for the relevant class of asset
2	Apply under Section 514(2) in Form No. 169
3	Submit the application duly verified in the prescribed manner
4	Pay the non-refundable fee of ₹10,000 along with the application
5	Provide required details/documents — PAN, contact details, class of asset, qualifications, experience, declarations/disqualifications
6	After registration, qualify for the examination within the period notified by the Central Government
7	If the examination is not passed within the specified period, registration is cancelled from the end of that period

Key Points to Remember:

Rule 246(1): An application must be made in Form No. 169 with a ₹10,000 non-refundable fee.
Rule 246(4): Existing Wealth-Tax Act valuers with a valid certificate as on 31.03.2026 may continue without paying a fresh fee, but must update their details via Form No. 169 by 30.09.2026.
Rule 246(6) & (7): Passing the prescribed examination is mandatory. Failure leads to cancellation of registration.

Final Words

The Income-Tax Rules, 2026, represent a landmark development in the professionalisation of valuation in India. By consolidating the role of the Registered Valuer under Section 514 — covering registration, qualifications, fee structure, reporting standards, disciplinary provisions, and use in tax and search proceedings — the new framework creates a more accountable and competent valuation profession.

For practising valuers, particularly those currently registered under the Wealth-Tax Act, 1957, the critical immediate action is to update their registration details in Form No. 169 before 30th September 2026, and thereafter to prepare for the prescribed examination.

The profession stands at the threshold of a new era — one that demands not merely experience and reputation, but formal examination-backed competence and regulatory compliance.