Can a person purchase any property at a price more than circle rate?

952 votes

Circle rate is for the purposes of purchasing the property for not less than the same but it may be more than the circle rate on which stamp duty need to be paid. So the amount of sale consideration even higher than the circle rate has to be mentioned in the transfer document and on that amount stamp duty is required to be paid.

Advocate S P Srivastava LawRato

787 votes

Buying above circle rate is not a problem. One will have to pay the stamp duty as per the total sales consideration. It's an issue if you sell it below the circle rate, also from income tax point of view.

LawRato LawRato

881 votes

Hello,
Yes the purchaser can buy property in any rate, not necessarily of circle rate but the stamp duty would then be charged at the deed value mentioned in the deed and not on the circle rate, which is lower .
Regards,
Jayatee Chatterjee
Solicitor/Advocate

Advocate Jayatee Chatterjee LawRato

890 votes

See the purchase deed doesnot depend only on the circle rate. Most fundamental issues are that the contract must be valid and all the essentials must be followed. If some person wants to sell a property at X rate and if the buyer without any undue influence is willing to pay the consideration then its valid sell.

Advocate Ramaditya Tiwari LawRato

750 votes

Circle rate is the minimum rate at which properties can be sold or transfered. Market rate is the rate arrived at between the seller and purchaser. The property can be registered at a rate more than the circle rate.

Advocate Aditi Gupta LawRato

318 votes

The circle rate, also known as the guidance value or ready reckoner rate, is the minimum price at which a property can be registered during a sale. It is determined by the local government to prevent underreporting of property transactions and to calculate stamp duty and registration charges. Here are the key points related to circle rates and selling property above the circle rate:

1. Circle Rate Definition: The circle rate is the minimum value at which a property can be registered. It serves as a reference point for property transactions and is used to calculate stamp duty and registration charges. It is typically determined by the local government and can vary from one locality to another.
2. Selling Property Above Circle Rate: Yes, it is possible to sell a property above the circle rate. The circle rate represents the minimum price for registration purposes. Buyers and sellers can agree on a price above the circle rate, but they should be aware of potential implications such as higher stamp duty and capital gains tax .
3. Sale Consideration vs. Stamp Duty Value: If the sale consideration (the actual sale price) is more than the stamp duty value (circle rate), the stamp duty will be calculated based on the higher sale consideration. This can result in higher stamp duty payments for the buyer.
4. Circle Rate vs. Market Value: The circle rate is typically lower than the market value of a property. Sellers may want to sell above the circle rate to reflect the true market value. However, buyers should consider the implications of higher stamp duty and taxes when purchasing above the circle rate.

In summary, while it's possible to sell a property above the circle rate, both buyers and sellers should be aware of the financial implications, including higher stamp duty and taxes. It's essential to consider the local circle rate and current market conditions when entering into property transactions.

Advocate Chikirsha Mohanty LawRato

73 votes

In a case where the actual price of the sale is higher than circle rate, the government may collect an extra tax from the seller between 22% and 25% depending on the difference in price. The buyer won't be charged any extra tax in this situation due to the "deeming" provision.

Advocate Chikirsha Mohanty LawRato