Anomaly between official estimates and prevailing rates highlighted at public hearing
Revenue, registration departments working on latest revision to come into effect from January 2007"A lot of confusion can be avoided if authorities publish 1981 GL values"
CHENNAI: What is the difference between market value of a property and the government-fixed guideline value? A lot.
According to Chennai resident K. Harinathan, the difference was enough to drop his plans to buy a flat in Kattankulathur.
"I could get only a bank loan for Rs. 5 lakh as the seller registered the deed as per the lower guideline value. The actual price of the flat was Rs.12 lakh. Where would I go for the rest of the money?" asks this retired banker.
This anomaly was raised repeatedly by owners, valuers and property developers who attended the public hearing at the Chennai Collectorate on Tuesday by the committee looking into revision of guideline values. While one suggested that the proposed guideline value of land in Periamet was less, another pointed out that those parts of Moore Street closer to NSC Bose Road were costlier. Adopting a uniform GL value for the entire street would not be feasible, he argued.
The official team, including Chennai Collector R. Jaya, replied that they had already categorised the street in five segments so each portion could be valued differently.
All the responses and suggestions would be taken into consideration as part of the government's detailed exercise to find the market values to make land deals transparent and to check undervaluing by buyers who try to avoid paying higher registration duty, said a senior revenue department official.
The annual revision of guideline values ran into rough weather in 2003 after many raised objections to anomalies between the rates fixed by the government and the market prices, the official said.
The data collection and revision were initially done by the revenue department and later, by the registration department.
However, the two departments are working together in the latest revision that would come into effect from January 2007.
According to C.H. Gopinatha Rao, member of Institute of Valuers and one of the participants, it is for the first time that the registration department has given the opportunity for the public to express their views on the guideline values of land they propose to revise.
However, he said, "it may not be possible to have a method to fix GL values without anomalies as each site has different characteristics."
According to Mr. Rao, in cases where sale value is less than GL value, the sellers have to calculate capital gains based on the higher value (GL).
They end up paying capital gain tax for the amount not received towards the sale.
Mr. Rao says that the registration department should immediately update GV values in case of rapid rise in demand for land, as is happening in the IT corridor.
The lower value, he says, gives scope for concealment of unaccounted money resulting in loss of revenue for the state.
Also, a judicial committee consisting representatives from Chennai Metropolitan Development Authority, the income tax department and the legal fraternity would help redress grievances faster and better than making appeals to deputy collector (stamps), IG (registration) or filing writ petitions in the court, he added. Mr. Harinathan, who sold his ancestral house recently and filed his income tax returns last year, is still awaiting the day when the taxman will knock on his door.
"Because of non-availability of 1981 GL values from the sub-registrar's office, I had to make a guesswork as far as land value was concerned to arrive at the current sale figure," recalls Mr. Harinathan.
Now, he is not sure whether IT officials will accept his figure or ask him to furnish documentary evidence on how he arrived at the sale figure.
"A lot of confusion can be avoided if authorities publish the 1981 GL values, the figure for all buildings constructed before 1981, along with the revised ones," says Mr. Harinathan.