Guidance value vs market value

Every flat you look at has two prices attached to it. One is whatever you and the seller agree to. The other is a figure the Karnataka government has already fixed for that street, or that layout, for the purpose of stamp duty and tax: the guidance value. Buyers usually meet the term for the first time at registration, when the sub-registrar asks for it, but it is worth knowing well before then, because it can change what you owe on top of the price, and sometimes what you owe tax on.

When the guidance value sits below your agreed price, as it does for most flats bought at a fair price, it changes nothing: you pay duty and tax on what you actually paid. The problem starts when the two numbers move apart, in either direction. This guide sets out what guidance value is, how to look yours up before you sign anything, what the Karnataka Stamp Act does when the declared price looks too low, and what the Income-tax Act, 2025 does when the guidance value comes out higher than the price – worked through on one flat, priced at ₹1 crore, against two different guidance values.

What guidance value is

The Karnataka Stamp Act gives a committee, not an officer at your local sub-registrar’s office, the job of setting these figures. Section 45B constitutes a Central Valuation Committee, chaired by the Inspector General of Registration and Commissioner of Stamps, “for estimation, publication and revision of market value guidelines of properties in any area in the State at such intervals and in such manner as may be prescribed, for the purpose of section 45-A.” The Act calls the result “market value guidelines”; everyone else calls it guidance value. The Committee is, in its own words, “the final authority for the formulation of policy, methodology and administration of the market value guidelines in the State,” and it works through sub-committees in every district and sub-district, which is why the figure differs street by street rather than city-wide.

It is a government floor for valuation, not a market price. Nobody surveys what flats on your street actually sold for last month before setting it; the Committee estimates and periodically revises a schedule, and the schedule is what stamp duty and several tax rules run on. For an apartment specifically, the Stamp Act’s schedule goes further: where a conveyance is executed by a promoter, a landowner or a developer for a flat or apartment, duty runs on “the market value equal to the market value of the fully constructed flat or apartment or unit, irrespective of the stage of construction, deeming it as fully constructed.” An unfinished flat is valued, for this purpose, as if the builder had already handed over the keys. Every other charge that sits on top of the price – GST, the builder’s own charges, your bank’s fees – is covered in the full-cost guide; this one stays on the two numbers that decide your valuation.

The last revision, and since

Bengaluru’s current guidance values are the 2023-24 schedule. IGR Karnataka’s own site still shows this as the live figures: its “Revised Guidelines Value” page lists 257 Sub-Registrar-office jurisdictions across the state, each with its own gazetted, survey-and-street-wise schedule for 2023-24, filed under a “2023-24 Gazette-CVC” folder. As of 10 Sep 2026 we could not find a later general revision gazetted anywhere on the department’s site; the 2023-24 figures are still what a sub-registrar in Bengaluru will check your declared value against. Section 45B sets no fixed yearly cycle – revisions happen “at such intervals ... as may be prescribed” – so there is no scheduled date to watch for. Check the current position yourself before you rely on any figure quoted to you, including the one in this guide by the time you read it.

Looking up your guidance value

Two official routes, both free. The Department of Stamps and Registration publishes the schedule itself at igr.karnataka.gov.in, on the “Revised Guidelines Value” page: pick your district, then the Sub-Registrar office your flat falls under (Bengaluru has dozens – Malleshwaram, Indiranagar, Hebbal, Byatarayanapura and so on, each a separate entry), and open the gazette PDF for that office. It lists guidance values survey number by survey number, street by street, in the same document the government notified. The same registration and valuation services also sit on the Kaveri Online Services portal at kaveri.karnataka.gov.in, the site you will eventually use to register the sale deed itself; our registration-day guide covers that day.

Your Sub-Registrar office is on your flat’s encumbrance certificate and on the builder’s allotment paperwork if it is a new project; the documents guide covers the EC in full. Match the survey number and layout name on the guidance-value schedule against the same details on your title documents before you trust a figure – a mismatched entry a few streets over is a common way to read the wrong rate. Third-party property portals often quote a guidance value too; treat those as a starting point only. What matters at registration is the figure the sub-registrar reads off the department’s own schedule, not a portal’s estimate of it.

Stamp duty on the higher figure

The Stamp Act’s schedule charges conveyance duty “on the market value of the property which is the subject matter of conveyance,” at five per cent of the value, under Article 20(1). In practice “the market value” here is whichever is higher: the price stated in your sale deed, or the guidance value published for that property. You cannot pay duty on the guidance value if your price is higher, and you cannot pay it on your price if the guidance value is higher – the Act, and the sub-registrar checking your document, takes the larger of the two. Cess, surcharge and the registration fee all then run off that same figure; the full-cost guide works through the rates.

If you try to register at a price the sub-registrar believes understates the guidance value, section 45A gives the officer a specific procedure rather than a discretion to just refuse. Having regard to the Committee’s published figures, “or otherwise,” if the officer has reason to believe the market value “has not been truly set forth,” the Act says the officer “shall after arriving at the estimated market value, communicate the same to the parties and unless the parties pay the duty on the basis of such valuation, shall keep pending the process of registration and refer the matter along with a copy of such instrument to the Deputy Commissioner for determination of the market value of property and the proper duty payable thereon.” The Deputy Commissioner then rules, “as far as may be within ninety days,” after hearing both sides. Either you pay the sub-registrar’s estimated figure on the spot and register straight away, or the document sits pending while the Deputy Commissioner decides. An appeal goes to the Deputy Inspector General of Registration, but only once you have deposited fifty per cent of the disputed duty; get the timing wrong and 12% annual interest runs on the balance. The practical answer is to check the guidance value yourself before you settle a price, so this referral never starts.

Two guidance values, one flat

Take the same flat, agreed at ₹1 crore, and run it through two guidance values published for the same address.

Scenario A is the ordinary case, and it is how most flats are bought: the price already clears the guidance value, so nothing beyond the usual stamp duty and registration in the full-cost guide applies. Scenario B is the one worth understanding before it happens to you, because it changes two things at once – what you pay to register, and, if the gap is wide enough, what gets taxed.

What the gap costs in tax

The Income-tax Act, 2025 gives “stamp duty value” its own definition: “the value adopted or assessed or assessable by any authority of the Central Government or State Government for the payment of stamp duty in respect of an immovable property” (section 2(105)). On our scenario B flat, that is the ₹1.12 crore guidance value the sub-registrar will charge duty on, not the ₹1 crore price. Three separate rules key off the gap between that figure and what was actually paid, and all three use the same tolerance: the excess is ignored only if it is no more than the higher of ₹50,000 or 10% of the consideration. On our flat, 10% of ₹1 crore is ₹10 lakh; the actual gap is ₹12 lakh; ₹12 lakh is more than ₹10 lakh, so all three rules switch on. None of them charges tax on just the amount over the tolerance – once the gap clears it, the whole gap counts.

For the buyer, the Act treats the gap as if you had received something for nothing. Under the heading “Income from other sources,” where a buyer pays for immovable property and “the stamp duty value of such property ... exceeds such consideration” by more than the tolerance, “the stamp duty value of such property” – here, the whole ₹12 lakh gap – is added to the buyer’s income for the year (section 92(2)(m)(ii)(B)). It is taxed at your normal slab rate alongside your salary or other income, not at a fixed rate, so what it actually costs you depends on where the rest of your income already sits. Illustratively, if this ₹12 lakh lands on a buyer already in the top slab – 30% plus 4% cess, 31.2% in all – that is up to ₹3.74 lakh of tax on a gap you never received in cash. A buyer lower down the slabs pays less; either way, it is worth knowing before you sign that a wide gap is not only a stamp-duty question.

The seller carries a parallel rule, in two forms depending on who is selling. An individual reselling a flat they own is disposing of a capital asset: where the price received “is less than the stamp duty value, then ... the stamp duty value shall be deemed to be the full value of the consideration” for computing the gain (section 78(1)), again subject to the same 110%-of-consideration tolerance. Our seller’s taxable gain is worked out as if they had actually sold for ₹1.12 crore, not the ₹1 crore they were paid. A builder selling a flat as stock rather than a capital asset gets the equivalent rule for business income: the same deeming, the same 110% tolerance, under section 53. Either way, the seller is taxed on money that never reached their account.

All three rules share one more feature worth knowing. Where the date you fixed the price by agreement is different from the date you register, and part of the price was already paid through a bank or other specified electronic mode by the agreement date, you may use the guidance value as it stood on the agreement date rather than whatever it has since become (sections 92(4)(a), 78(1)(a) and 53(3)–(4)). If a guidance-value revision is expected, a dated, part-paid-by-bank-transfer agreement for sale can lock in today’s figure.

One more number moves with the gap: TDS. Section 393(1) charges 1% on a property sale at ₹50 lakh or more, but the rate applies to “consideration ... or ... stamp duty value of such property, whichever is higher,” and the ₹50 lakh threshold is met if either figure crosses it. On our scenario B flat that is 1% of ₹1.12 crore, ₹1,12,000, not 1% of the ₹1 crore price – ₹12,000 more than the usual case, deducted from what you pay the seller and deposited with the tax department on Form 141.

Cash, and how banks value it

A separate, general rule bites regardless of any gap. Section 186(1) of the Income-tax Act, 2025 bars anyone from receiving ₹2 lakh or more in cash – “in aggregate from a person in a day,” on a single transaction, or across the transactions for a single event – except by account payee cheque, account payee draft, or an electronic mode. It is not specific to property, but a flat is exactly the kind of purchase where someone might be tempted to hand over a large token amount in cash: don’t. It falls on the person receiving the money, so a seller taking ₹2 lakh or more in cash is the one exposed, but as the buyer you have every reason to insist on a bank transfer for the same reason – a cash receipt this large is hard to explain later if either side’s figures are ever questioned.

Your bank’s own valuation of the flat is a separate exercise from the government’s guidance value, and the two are not required to match. RBI sets the loan-to-value bands a bank lends against by the size of the loan – 90% up to ₹30 lakh, 80% up to ₹75 lakh, 75% above (Commercial Banks – Credit Facilities Directions, 2025, para 111) – against the bank’s own assessment of the property’s value, with stamp duty and registration excluded from that value unless the home costs ₹10 lakh or less (para 113). Nothing in RBI’s directions ties that valuation to the state’s guidance value, so do not assume your bank will lend against whichever of the two numbers is larger; ask your lender directly how it valued the flat before you rely on the loan amount it quotes.

Before you sign

• Look up the guidance value yourself, on igr.karnataka.gov.in or the Kaveri portal, before you agree a price – not after.
• Match the survey number and layout name on the guidance-value schedule against your title documents; a mismatched entry gives you the wrong rate.
• Budget stamp duty and registration on the higher figure, not the price, if the guidance value could be above it.
• Never pay or accept ₹2 lakh or more in cash for any part of the price; use a bank transfer every time.
• If a revision looks likely, a dated agreement for sale with part payment by bank transfer can lock in today’s guidance value.
• If the gap is wide, work out what it adds to your taxable income, or your seller’s, before you register – not after the tax department does.
• Ask your bank directly how it valued the flat; do not assume it matches the guidance value.