KNOWLEDGE BANK FROM B KANAGA SABAPATHY
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Message from B. Kanaga sabapathy 12.08.2023
VALUATION METHOD FOR PROPERTY CONSTRUCTED IN TWO PHASES?
Question :
A plot was acquired in 1998 – 99. Ground floor was constructed in 1999 – 2000. First floor was built in 2013 – 14. Property was sold for a net consideration of Rs. 1,25,00,000/- in 2023 – 24.
What is the method of valuation?
My opinion :
I presume the purpose of valuation is to ascertain the capital gains.
A. Since the plot and the ground floor was acquired before 01.04.2001, ascertain the FMV of the plot + ground floor as on 01.04.2001. The C.I.I. for 2001 – 02 is 100.
B. Ascertain the amount spent for first floor in 2013 – 14. The C.I.I. for 2013 – 14 is 220.
C. Calculate the indexed cost of acquisition for plot & ground floor [(A ÷ 100) x 358].
D. Calculate the indexed cost of acquisition for first floor [(B ÷ 220) x 358] .
E. Add C + D.
F. The net sale consideration is Rs. 1,25,00,000/-
G. 1,25,00,000 – (C + D) will be the capital gain.
With best wishes,
B. KANAGA SABAPATHY
[email protected]
www.bkanagasabapathy.com
About the Author:-
- Mr. B. Kanaga Sabapathy born in 1951, is a Civil Engineer who belongs to the 1972 batch of Regional Engineering College, Tiruchirappalli in Tamilnadu.
- He is a Registered valuer of the Central Board of Direct Taxes, a Professional Engineer and also a Chartered engineer. Valuation is his main profession..
- He was the National Vice-President of the Institution of Valuers (India) for 11 terms.
- He is a regular contributor of articles in the Indian Valuer Journal from the year 1985. His articles especially his regular column “Questions & Opinions” are very popular among the practising valuers in India.
- His book “Guidelines on Valuation for Banks” (2002) is used to be referred by many banks. The valuation formats designed by him were accepted and adopted as the formats by many banks in the country.
- His son K. Arun and daughter B.K. Aruna are also approved valuers and they also contribute articles to the Indian valuer journal.
- His guru: Mr. C.H. Gopinatha Rao, Chennai.
- His mentor: Mr. R.K. Gandhi, Mumbai.
- His role model: Mr. S. Rajaratnam, Chennai.
- His best students: Thousands of valuers in the country
