Introduction
While searching for a home anywhere in India, you will hear the term ‘Ready Reckoner Rate’. What is it used for? Why, when it comes to property purchases, this rate fixed by the government plays a vital role in determining the minimum value of the property. It also affects mandatory taxes like stamp duty & registration charges. But what is the ready reckoner rate? Now let us analyze the whole matter.
The ready reckoner rate, also known as the Circle Rate or Jantri Rate varies from state to state in India. In some areas, these rates are fixed by the state government. In some other areas, the local authorities decide.
However, property cannot be bought or sold below this predetermined rate in India. In this article, we are explaining the ready calculation rates, or circle rates, and the difference between them and the market rate. We also analyze the impact of circle rates on real estate transactions. But first, let’s look at the latest update on ready reckoner prices.
What Are Ready Reckoner Rates or Circle Rates?
Ensures accurate valuation of real estate assets. All state governments publish area-wise rates on an annual basis, known as circle rates. Also referred to as Ready Reckoner Rates (RRR). Circle rates vary across states, cities, and regions.
Circle rates serve as a benchmark. No property transactions will take place in the area under its jurisdiction. Generally, this is the minimum price a buyer has to pay for a property, plus stamp duty and registration fees levied by the government. However, if the actual cost of the property is more than the circle rate, stamp duty and registration fees will be payable based on the actual cost of the property.
- Example: For a property in a specific area, suppose there is an RRR of Rs. 5,000. The market price of the property is Rs. 6,000, the buyer should ideally pay stamp duty and a registration fee of Rs. 6,000. However, for the registration of this property, the fee is Rs. per sq. ft. 5,000 will be the benchmark. The city authority will not register under it.
Conclusion
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Also read: Ready Reckoner Rates in Bandra Kurla Complex, Mumbai