Capital Gains Valuation: Fair Market Value as on 1 April 2001

If you are selling a property you bought before April 2001, this one report can cut your tax bill dramatically. Here is what it is, why it works, and how we prepare it.

• Working since 1995
• Government approved valuer
• ISO 9001 certified
• Reports in 48 to 72 hours
• Trusted by 800 plus chartered accountants, CPAs and lawyers

The short version

When you sell a property, you pay tax on the profit. The profit is the sale price minus what the property cost you.

Here is the part most people do not know. If you bought the property before 1 April 2001, the law does not force you to use the old purchase price as your cost. You are allowed to use what the property was worth on 1 April 2001 instead.

Property prices in 2001 were far higher than in the seventies, eighties or nineties. So using the 2001 value makes your cost look much bigger, which makes your profit look much smaller, which means you pay far less tax.

To use that 2001 value, you need a report from a government approved valuer saying what it was. That report is what we prepare.

A real example

A father buys a flat in Delhi in 1985 for eighty thousand rupees. His children sell it today for one crore.

Without a 2001 valuation. The cost is treated as eighty thousand rupees. On paper the profit looks enormous.

With a 2001 valuation. We establish that the flat was worth about twelve lakh rupees on 1 April 2001. That twelve lakh now becomes the cost. And because the law also lets you adjust that cost for inflation, twelve lakh is scaled up using a government published number called the cost inflation index. For the year 2026-27 that index is 384. Since the index for 2001 is 100, the twelve lakh is multiplied by roughly 384 divided by 100.

The taxable profit falls by a very large amount. That is the whole reason this report exists.

Put your own numbers into our free calculator and see the difference for yourself. It takes about a minute and we do not ask for your phone number.

Do you actually need this report?

You need it if all of these are true.

• You are selling, or have already sold, a property
• The property was bought before 1 April 2001, by you or by someone you inherited it from
• You want to pay tax on the real gain rather than an inflated one

If you bought the property after April 2001, you do not need this. You simply use what you paid. You might still need a valuation for a loan, a visa or a court matter.

If you inherited the property, what matters is when the original owner bought it, not when you inherited it. If your grandfather bought the land in 1970 and you inherited it in 2015, the 2001 rule still applies to you. More on inherited property.

Why you cannot just pick a number

People sometimes ask us to simply write a high figure. We will not, and no honest valuer will.

The 2001 value has to be backed by evidence. If a tax officer looks at the report and finds nothing behind the number, they can reject it and refer the case for a fresh valuation. You then lose the benefit entirely, and you may face a penalty on top.

A properly evidenced figure that is slightly lower is worth far more to you than an invented figure that falls apart under scrutiny.

What we actually do to establish the 2001 value

1. We inspect the propertyOur engineer measures the plot and the built up area, checks the type and age of construction, notes the condition, and confirms the boundaries against your papers. Every photograph records the date, time and exact location.
2. We pull the 2001 government ratesEvery colony has an official notified rate, and there are records of what those rates were back in 2001. This is the backbone of the report.
3. We find real sales from that periodRecords of what similar properties in the same area actually changed hands for around 2001. This is the strongest evidence there is.
4. We adjust for your specific propertyA corner plot is worth more. A ground floor shop is worth more than a third floor room. An old building with poor construction is worth less. These adjustments are set out openly so anyone can follow them.
5. We write it up and sign itThe report shows the working, not just the conclusion. That is what makes it hold up.

Papers to keep ready

Ideally you would have all of these. In practice almost nobody does, and that is fine.

• The sale deed or title document
• The original purchase deed, especially for inherited property
• Property tax receipts
• The approved building plan, if you have it
• Bills for any major construction or improvement you paid for
• The sale agreement, if the sale is already under way

Missing the old papers? Very common with properties from the seventies and eighties. Records at the sub registrar office and the notified rates for the area can usually fill the gap. Tell us what you have and we will tell you honestly whether it is enough.

Get the exact list for your situation

How long it takes

Normally 48 to 72 hours from the site visit, once we have the basic papers. If the property is far from Delhi or the history is complicated, we will tell you at the start rather than at the end.

One thing to know about the new tax law

From 1 April 2026 India moved to a new Income Tax Act, replacing the one from 1961. The core principle we have described here has not changed. What has changed is the section numbering and some of the wording, so if you are reading older articles online you may see references that no longer match. We explain what changed here.

If your property is in Delhi, see our Delhi page.