What is circle rate? Meaning and names in every state

If you are buying or selling a property anywhere in India, you will hear the words circle rate sooner or later. Your lawyer will mention it, the bank may ask about it, and it decides how much stamp duty you pay.

In simple words, circle rate is the lowest value the government puts on a property in a particular area. When you register a sale, stamp duty and registration fee are charged on this value or on your deal price, whichever is higher. So even if you buy a flat cheaply, you can’t pay stamp duty on less than circle rate value.

How circle rate works: an example

Suppose you are buying a 1,000 sq ft flat. Circle rate for flats in your zone is ₹4,000 per sq ft, so circle rate value of the flat is ₹40 lakh.

• If you agree on a price of ₹55 lakh, stamp duty is charged on ₹55 lakh, because your price is higher.
• If you agree on ₹35 lakh, stamp duty is still charged on ₹40 lakh, because circle rate value is higher.

In a state with 5% stamp duty and a 1% registration fee, the first deal would cost you ₹3,30,000 in duty and fees. The second would cost ₹2,40,000, charged on ₹40 lakh and not on ₹35 lakh. You can find the value of your own property with the property value calculator.

Why the government sets a circle rate

Without a minimum value, it would be easy to show a lower price in the sale deed and pay the rest in cash. The state would lose stamp duty, and more black money would go into property deals. A minimum value set by the government makes this much harder. Whatever price is written in the deed, stamp duty can’t fall below a fair level for that area.

The same value is also used by the income tax department. If a property is sold well below its circle rate value, the seller and even the buyer may have to pay extra tax. Our guide on section 50C explains how.

How circle rates are set

Every state sets its own circle rates. They are not one figure for a whole city. Instead:

• Each area is split into zones, and every zone has its own rate. A busy main road and a lane behind it can have very different rates.
• Each zone has separate rates for different types of property, such as flats, plots, shops, offices and industrial units. Shops usually have the highest rates.
• Most states fix the rate per square metre, so you multiply it by the area of your property to get its value.
• States revise their rates from time to time. Some do it every year, others go several years without a change.

To find the rate for your own property, you need your area and the zone that covers your survey, plot or CTS number. Our guide on how to read circle rates walks you through it.

Circle rate names in every state

The idea is the same across India, but each state has its own name for it. If someone in Gujarat talks about Jantri, or someone in Bengaluru talks about guidance value, they mean the same thing as circle rate.

States

Union territories

Names marked with * are the ones in common use. The exact wording can differ between departments in that state.

Where a state calls it “market value”, it still means the government’s value for stamp duty, not the price a broker quotes.

Circle rate and market price are two different things

Many people assume circle rate tells them what a property is worth. It doesn’t. The government fixes it for a whole zone and revises it only once in a while, while the price a buyer pays changes with demand, the building and the exact location. That is why the two numbers rarely match. Our guide on circle rate vs market value shows what happens to your stamp duty and tax when your price is above or below circle rate.

Mistakes to avoid

• Using the average rate for a whole area. One area can have dozens of zones, so always find the rate for your exact zone.
• Mixing up units. If the rate is per sq m and your flat is in sq ft, convert first. Multiplying a per sq m rate by sq ft makes the value about 10.76 times too high.
• Using the flat rate for a shop. Shops and offices have their own rates, usually higher.
• Using a draft rate. Proposed rates published for objections don’t count until the government brings them into effect.