Reference to Valuation Officer
[Section-91 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 91(1) of Income Tax Act 2025
91(1) For ascertaining the fair market value of a capital asset for this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer,—
- (a) if the value of the asset claimed by the assessee is as per the estimate by a registered valuer, but the Assessing Officer is of the opinion that the value so claimed is at variance with its fair market value;
- (b) in any other case, if the Assessing Officer is of the opinion that––
- (i) the fair market value of the asset exceeds the value claimed by the assessee by more than the percentage or amount, as prescribed; or
- (ii) having regard to the nature of the asset and other relevant circumstances, it is necessary so to do.
Section 91(2) of Income Tax Act 2025
91(2) The provisions of section 269(3) to (8) shall , with necessary modifications, apply in relation to such reference made under sub-section (1).
FAQs on Section 91 of Income Tax Act 2025
What is the purpose of referring a valuation to a Valuation Officer under Section 91(1)?
The purpose is to ascertain the fair market value of a capital asset for the purposes of the relevant Chapter.
When can the Assessing Officer refer the valuation to a Valuation Officer?
The Assessing Officer may refer the valuation when the value claimed by the assessee is based on a registered valuer’s estimate but appears at variance with the fair market value, or in other cases based on prescribed thresholds or asset characteristics.
Can a reference be made even if a registered valuer has already estimated the value?
Yes, if the Assessing Officer believes the value claimed by the assessee, based on a registered valuer’s estimate, is at variance with the fair market value.
What happens if no registered valuer’s estimate is provided?
The Assessing Officer can still make a reference if he believes the fair market value exceeds the claimed value by more than the prescribed percentage or amount, or if necessary considering the nature and circumstances of the asset.
Is there a threshold difference prescribed for making such a reference?
Yes, the Act mentions that a prescribed percentage or amount must be exceeded for reference in certain cases, though the exact threshold will be as prescribed in the rules.
What does Section 91(2) state regarding procedures for reference?
Section 91(2) states that the provisions of Section 269(3) to (8), with necessary modifications, shall apply to references made under Section 91(1).
Which section governs the procedure for Valuation Officer’s reference?
Section 269(3) to (8), as adapted under Section 91(2), governs the procedure.
From when are these provisions applicable?
These provisions are applicable from 1st April, 2026.
Who is a Valuation Officer under this context?
A Valuation Officer refers to an officer authorized to estimate the fair market value of a capital asset under the Act.
What is meant by ‘fair market value’ in this context?
Fair market value generally refers to the price an asset would fetch if sold in the open market, determined according to the Act’s provisions.
Can the assessee dispute the valuation made by the Valuation Officer?
While Section 91 itself doesn’t detail the dispute mechanism, generally, the assessee may challenge such findings through objections, appeals, or other remedies provided under the Act.
Does the assessee’s valuation by a registered valuer guarantee acceptance by the Assessing Officer?
No, the Assessing Officer can still refer the valuation to a Valuation Officer if he doubts the accuracy of the registered valuer’s estimate.
What are ‘necessary modifications’ mentioned in Section 91(2)?
‘Necessary modifications’ imply that the provisions of Section 269(3) to (8) will apply with adjustments needed to fit the context of Section 91 references.
Is reference to a Valuation Officer mandatory in all cases of variance?
No, it is discretionary based on the Assessing Officer’s opinion as per conditions specified in Section 91(1).
Can the Assessing Officer determine fair market value without referring to a Valuation Officer?
Yes, if he is satisfied with the evidence or valuation available, a reference is not mandatory.
What assets can be referred to a Valuation Officer?
Any capital asset whose fair market value is relevant for the purposes of the concerned Chapter.
What if multiple assets are involved? Can separate references be made?
While Section 91 doesn’t expressly cover this, logically, the Assessing Officer can make separate references if needed for different assets.
Refresh Page