Capital gains
Fair Market Value as on 1 April 2001 (FMV 2001)
How registered valuers establish fair market value as on 1 April 2001 for capital gains, the evidence required, and why assessing officers reject estimates.
By ValuerDekho editorial team · Reviewed by Reviewing registered valuer (to be named) · Updated 6 September 2026
The rule in one line
For a capital asset acquired before 1 April 2001, the taxpayer may take its fair market value on that date as the cost of acquisition, subject to the 2001 stamp-duty value as a floor. A registered valuer’s report is the accepted evidence.
Why it matters so much
A Delhi flat bought in 1985 for ₹2 lakh may have been worth ₹18 lakh in 2001 and ₹1.5 crore today. Using ₹2 lakh as cost produces a gain of ₹1.48 crore; using ₹18 lakh produces ₹1.32 crore, a difference of ₹2 lakh in tax at 12.5%. For larger or better-located properties the difference runs into tens of lakhs.
Evidence valuers gather
- Registrar data. Registered sale deeds in the locality from 1999 to 2003; the closer to April 2001 the better.
- 2001 guideline value. The circle rate, ready reckoner, guidance value or jantri in force on 1 April 2001, as a floor and as a sanity check.
- Published indices. Rate indices from valuation bodies and the National Housing Bank’s Residex where available; the Cost Inflation Index is not a property price index and is not used to back-cast.
- Property records. Approved plan, completion date, old tax bills, society records; these establish what existed in 2001.
- Infrastructure history. Metro lines, flyovers, airports and IT parks that did not exist in 2001 are stripped out of comparisons.
Methods
For flats and plots, sales comparison adjusted back to 2001. For independent houses, land value by comparison plus the depreciated replacement cost of the structure as it stood in 2001 (using 2001 construction rates and age at that date). For rented commercial property, capitalisation of 2001 rents at 2001 yields.
Reconciliation and the report
A good report shows two or three indications converging, explains adjustments, states the 2001 guideline value alongside, and concludes with a single figure. It includes today’s inspection and explains how the 2001 condition was inferred.
Common mistakes
Using today’s guideline value scaled down by inflation; ignoring post-2001 improvements (which must be added separately with their own dates); valuing land and building together for a self-built house; issuing a range instead of a figure.
Frequently asked questions
Can FMV 2001 be lower than the 2001 guideline value?
No. Where a stamp-duty value existed on 1 April 2001, the FMV you claim cannot be lower than it.
Do NRIs get indexation on the 2001 value?
No. For transfers after 23 July 2024 non-residents pay 12.5% without indexation; the 2001 value still replaces the historical cost.
Related guides
- Form 170 Valuation Report: What It Must Contain
- Gift and Inherited Property Valuation in India
- Property Valuation Methods in India, Explained
- Registered Valuer Fees: Rule 248 Worked Examples
Last reviewed 6 September 2026 by Reviewing registered valuer (to be named). Regulatory references are to the Income-tax Act 2025 and Income-tax Rules 2026 (in force from 1 April 2026) with the former 1961-Act section numbers in brackets. This is general information, not tax or legal advice.