FMV (Fair market value ) as on 01-04-2001

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Roshni

Student CA Final

66 Points Posted on 13 January 2020

FMV (Fair market value ) as on 01-04-2001

An Assessee bought a house property in 1985. He wants to sell the same now. In order to compute Long term capital Gains the assessee can take indexation benefit by taking cost of acquisition as purchase price or FMV as on 01-04-2001.

How can one arrive at FMV as 01-04-2001

Cost of acquisition= Rs.90,000
Date of Purchase =1985
Cost Inflation Index
2001-02 = 100
2018-19 = 280

Calculate FMV as on 01-04-2001?

Replies (4)

Quick Summary

When selling a property purchased before April 1st, 2001, you can use either the original purchase price or the Fair Market Value (FMV) as of 01-04-2001 to calculate your long-term capital gains. To find the FMV, you can consult your local municipal office or sub-registrar's office. Using the FMV can potentially reduce your taxable capital gains, especially if the property value has significantly increased.

Debiprasad Jana

196 Points Posted on 13 January 2020

First you have to take FMV from your nearest municipal office.

suppose you FMV is 120000.
COA-120000x280/100=336000.

or you can take FMV 90000
coa- 90000x280/100=252000

rama krishnan

5751 Points Posted on 13 January 2020

You can get the fair market value from the sub registrar office

Anjani Chaudhary

22 Points Posted on 20 July 2023

If cost of acquisition is 2.8 times more than cost of FMV there will no where be any LTCG meaning that no tax to government

Aashok Kumar Sharma

Finance/Compliance Consultant

73958 Points Posted on 07 November 2026

How to establish the 1 April 2001 FMV of a house bought in 1985:

• Sec 55(2)(b): for assets acquired before 1 April 2001, cost = actual cost or FMV as on 1 April 2001, at the assessee's option. For land or building, the FMV can't exceed the stamp duty value as on 1 April 2001 (proviso, from AY 2021-22).

• Get a registered valuer's report (valuer registered under the Income-tax rules or IBBI) valuing the property as on 1 April 2001. Valuers use the 2001 guideline or ready-reckoner rates plus building cost less depreciation.

• Also obtain the 2001 stamp duty / guideline value from the sub-registrar office (or the State's archived ready-reckoner rates). Your FMV can't exceed this.

• Indexed cost: FMV × CII of the year of sale / CII 2001-02 (100), for the 20% option (property bought before 23 July 2024, resident individual), or 12.5% on the gain without indexation. Choose the lower.

• Add cost of improvement after 2001 (indexed). Pre-2001 improvements are subsumed in the FMV.