Also known as Market value vs agreement value
In Maharashtra the terms are used side by side: the agreement value is written in the agreement or sale deed, and the market value is worked out from the ready reckoner rate for the area. The stamp duty and registration office compare the two and charge on the higher. Other states use the same idea with their circle rate or guidance value.
Home loans are usually sanctioned against the bank’s own valuation and the agreement value, not the market value. TDS on property is computed with reference to the higher of the agreed price and the stamp duty value.
For brokers, writing a realistic agreement value matters: a deliberately low figure can create stamp duty shortfall notices and tax trouble for both parties.
Example
A 2 BHK in Kalyan is sold for an agreement value of ₹62 lakh. The ready reckoner rate gives a market value of ₹58 lakh. Since the agreement value is higher, stamp duty is charged on ₹62 lakh. Had the deal been ₹55 lakh, duty would be charged on the ₹58 lakh market value.
Figures are illustrative, not market rates.
Questions about Agreement value
Is stamp duty paid on agreement value or market value?
On whichever is higher. The registration office calculates the government value from the ready reckoner or circle rate and compares it with the agreed price written in the document.
Does the bank lend on agreement value?
Banks lend against their own valuation and the agreement value, and within RBI’s loan-to-value limits. They generally will not lend on a market value that is higher than what the buyer is actually paying.
Sources
- Department of Registration and Stamps, Maharashtra · accessed
- Income Tax Department, e-filing portal · accessed
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