The price the buyer and seller agreed on.
₹80 lakh
The value used for stamp duty, also called Jantri, Ready Reckoner or guideline value. Don't know it? Use the property value calculator.
₹95 lakh
How the rules work
The same rules apply in every state in India, whatever your state calls its circle rate.
If circle rate value is more than 110% of the sale price, capital gains are calculated on circle rate value. Below that, your price is accepted.
If circle rate value is more than the price by over ₹50,000 or 10% of the price, whichever is higher, the buyer can be taxed on the whole gap as income.
If the price or circle rate value is ₹50 lakh or more, the buyer deducts 1% of the higher of the two from the payment to the seller.
An example
Suppose you sell a flat for ₹80 lakh, and its circle rate value is ₹95 lakh.
- For the seller, 110% of ₹80 lakh is ₹88 lakh. Circle rate value of ₹95 lakh is above that, so your capital gains are calculated on ₹95 lakh, not ₹80 lakh.
- For the buyer, the gap is ₹15 lakh. The limit is ₹8 lakh, which is 10% of the price, so the buyer may be taxed on ₹15 lakh as income.
- The buyer deducts TDS of 1% of ₹95 lakh, which is ₹95,000.
Now suppose circle rate value was ₹86 lakh instead. That is within 110% of the price, so the seller's price of ₹80 lakh is accepted. The gap of ₹6 lakh is also within the buyer's limit of ₹8 lakh, so neither side has a problem.
Old and new section numbers
The Income-tax Act, 2025 came into effect on 1 April 2026 and gave these rules new numbers. The rules themselves are the same.
If you think circle rate value is too high
Circle rates are fixed for a whole zone, so they don't always fit an old building or a plot with problems. If you feel your property is worth less, the seller can ask the income tax officer to get the value checked by a Valuation Officer. Keep a registered valuer's report ready. You can also challenge the value for stamp duty. See how to challenge stamp duty valuation.
Section 50C calculator: common questions
What is section 50C?
Section 50C of the Income-tax Act says that if you sell land or a building for less than its circle rate value, circle rate value is treated as your sale price for capital gains. It does not apply if circle rate value is within 110% of your price.
What is section 78 of the Income-tax Act, 2025?
It is the new number for section 50C. The Income-tax Act, 2025 applies from 1 April 2026, and the same rule, with the same 110% limit, is now in section 78. Sales made before that date still come under section 50C.
Can the buyer also be taxed?
Yes. If circle rate value is more than the price by over ₹50,000 or 10% of the price, whichever is higher, the buyer can be taxed on the full gap as income. This was section 56(2)(x) and is now section 92(2)(m) of the 2025 Act.
What if the agreement was signed long before registration?
You can use circle rate value on the date of the agreement instead, as long as at least part of the price was paid by cheque, draft or bank transfer on or before that date.
What if the seller has no PAN?
The buyer then has to deduct TDS at 20% instead of 1%. Make sure you have the seller's PAN before you pay.
For the full details, read our section 50C guide, or calculate stamp duty on the same deal.