So severe was the price correction that in some localities, the property prices even went below the circle rate. A circle rate is the minimum property rate defined by the government for specified areas. For instance, in some areas of Delhi, like Maharani Bagh and New Friends Colony, the per square metre circle rate is Rs7.74 lakh, while the prevailing market rate is below Rs6 lakh. But if according to the circle rate the property rate is determined to be Rs1.1 crore, the capital gain would be Rs35 lakh (Rs1.1 crore minus Rs75 lakh). According to the proposed amendments, no adjustment shall be made in a case where the circle rate value does not exceed by 5% of actual transaction value or market value.

Source: Mint February 04, 2018 19:07 UTC