As a professional, I understand the importance of quality content that is optimized for search engines. Today, I want to shed some light on the concept of “circle rate vs agreement rate” and how it impacts real estate transactions.
Firstly, let`s define what these terms mean. Circle rate is the minimum value at which a property can be registered with the government, while agreement rate is the actual price at which the property is sold between the buyer and the seller.
In India, the circle rate is determined by the state government and is used to calculate stamp duty and registration charges. It is meant to prevent the undervaluation of properties during transactions and ensure fair market value.
On the other hand, agreement rate is the actual value at which the property is bought and sold between the parties involved in the transaction. It may be higher or lower than the circle rate, depending on various factors such as location, demand, and amenities.
Now, let`s understand why circle rate vs agreement rate is an important issue in real estate transactions. In many cases, buyers and sellers may agree to a price that is lower than the circle rate to save on stamp duty and registration charges. This is known as an undervaluation agreement and is illegal.
Undervaluation agreements can lead to tax evasion and corruption in the real estate sector. They also result in a loss of revenue for the government, which further impacts public welfare schemes and development projects.
To curb this practice, the government has introduced penalties and fines for those found engaging in undervaluation agreements. They have also introduced measures to revise circle rates regularly to reflect market trends and prevent undervaluation.
In conclusion, the issue of circle rate vs agreement rate is a critical one in the real estate sector, and it is important to abide by government regulations and pay the appropriate stamp duty and registration fees. As a professional, my advice to real estate professionals is to stay informed about the latest developments in this area and ensure that their content reflects the right information.