Selling or Buying a Flat Below the Ready Reckoner Value: What Section 78 and the Buyer Rule Mean

If your deal price is below the stamp duty value, tax law can treat the higher figure as the sale price. The 110% tolerance, the agreement-date rule and the buyer's side.

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In parts of Mumbai, older flats sometimes sell below the ready reckoner (RR) rate. That's a real market price, but tax law looks at the stamp duty value too.

The seller's side: section 78

Under section 78 of the Income-tax Act, 2025 (section 50C of the 1961 Act), if you sell land or a building for less than its stamp duty value, the stamp duty value is deemed to be the sale consideration for computing capital gains. Two reliefs apply:

Relief	What it says
110% tolerance	If the stamp duty value does not exceed 110% of the actual consideration, the actual consideration is used
Agreement date	If the agreement and registration dates differ, the stamp duty value on the agreement date can be used, provided some or all of the consideration was paid on or before the agreement date through a specified banking or online mode
Valuation Officer	If you claim the stamp duty value is more than fair market value, and haven't disputed it elsewhere, the Assessing Officer may refer it to a Valuation Officer. If that value is higher than the stamp duty value, the stamp duty value is still used.

Example

Illustrative only. Sale price Rs 1 crore. Stamp duty value Rs 1.08 crore: within 110%, so Rs 1 crore is used. Stamp duty value Rs 1.15 crore: above 110%, so Rs 1.15 crore is treated as your sale price.

A deal below ready reckoner value can cost the seller and the buyer tax on money neither of them received.

The buyer's side

The buyer can also be taxed. Under the 1961 Act, section 56(2)(x) taxed the difference as the buyer's "income from other sources" where the stamp duty value exceeded the price by more than the higher of Rs 50,000 and 10% of the consideration. Commentators map this to section 92(2)(m) of the 2025 Act. Ask your CA to confirm the exact thresholds that apply to your purchase.

Why the cash payment matters

The agreement-date relief needs part of the payment by a banking or online mode on or before the agreement. A token paid in cash doesn't qualify. Always pay the booking amount by bank transfer or cheque.

What to do

Check the RR value on the IGR Maharashtra site before agreeing a price.
If the price is below RR, calculate the tax effect for both sides first.
Pay the token by bank transfer and keep proof.
Consider a registered valuer's report if the property's condition justifies a lower price.

Related reading

Negotiating a resale deal? Book a video call.

Sources

General information, not tax advice. Speak to a chartered accountant before acting.

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