Fair Market Value as on 1 April 2001 — what it is, why it matters, who signs it
The Income Tax Act lets you use the property's value as on 1 April 2001 instead of the original purchase price. Here's exactly when, how, and from whom.
If you bought (or inherited) property before 1 April 2001 and now want to sell it, the cost of acquisition for capital-gains purposes is your choice: either the actual purchase price or the Fair Market Value (FMV) as on 1 April 2001 — whichever is higher. For most pre-2001 properties this saves lakhs in tax.
Why 1 April 2001?
The Finance Act 2017 shifted the base date for indexation from 1 April 1981 to 1 April 2001. This was meant to simplify long-term capital gains calculations but introduced a new bottleneck: you now need a valuer to certify the 1 April 2001 value of the property.
Who can sign the certificate?
Only a Registered Valuer under Section 34AB of the Wealth-tax Act, 1957 (the 'Form N' valuer). The IBBI-registered valuer category, which exists under the Companies Act 2013, is NOT accepted for capital-gains FMV certificates. Picking the wrong cadre is the single biggest reason CA capital-gain filings get rejected.
How does the valuer estimate the 2001 value?
The valuer references registered transactions from 2000–2002 in the same locality, government circle-rate notifications from that period, and historic stamp-duty receipts. Proprify maintains a database of pre-2001 transactions across 76+ Indian cities, which lets our valuers issue defensible FMV certificates without delaying the report.
When you don't need a 2001 FMV
If your purchase was after 1 April 2001, you use the actual purchase price + indexation directly. No valuer report needed for capital gains, though you may still need a Section 50C valuation if the sale price is below the circle rate.