Letters: Unreliable guidance

This refers to the report "Budget aims at plugging tax leakages in property deals" (March 4). While the move to make buyers liable for "under-reporting" in property transactions is welcome, it relies too much on guidance values (or circle rates as it is called in some areas), and how well they proxy for market values. State governments set guidance values, with little to no transparency in how it is done. Many states have increased their guidance values recently, even when market prices have remained stable or have started falling. Moreover, guidance values are based more on the locality, and less on the property being sold. My own experience in selling an old, independent house recently in Chennai suggested that the lack of a parking space and good road access may bring down the actual market value by several lakhs, but not its guidance value. The new provision would ensure that even that single buyer, who came to buy my property, would have walked away owing to the additional tax burden.

Venkatesh Panchapagesan Bangalore

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