Govt. Approved Valuer vs IBBI Registered Valuer vs Bank Panel Valuer

What is the difference between a govt approved valuer and a registered valuer?

A govt. approved valuer usually means a valuer registered by the CBDT under Section 34AB of the Wealth Tax Act, 1957, whose reports are used for income tax purposes such as capital gains. A Registered Valuer under the Companies Act, 2013 is registered with the Insolvency and Bankruptcy Board of India (IBBI) and is needed for valuations required under the Companies Act and the Insolvency and Bankruptcy Code. A bank panel valuer is empanelled by a particular bank under that bank's own policy.

The three are separate registrations with separate purposes. One valuer may hold more than one, but holding one does not automatically give the others. Which one you need depends on who is going to rely on the report.

What is a valuer registered under Section 34AB of the Wealth Tax Act?

Section 34AB of the Wealth Tax Act, 1957 provides for registration of valuers by the CBDT. Rule 8A of the Wealth Tax Rules sets out the categories of registration by type of asset, such as immovable property, agricultural land, jewellery, and plant and machinery, along with qualifications and experience. Category I covers immovable property, the category that matters for houses, flats, land and commercial buildings.

Wealth tax was abolished from assessment year 2016-17, but these registered valuers are still relied on for income tax work. The most common use is the valuation of property for capital gains, including fair market value as on 1 April 2001, along with valuations for gifts, cost of improvement and replies in income tax assessments.

Er. B.P. Singh is a Govt. Approved Valuer (CBDT), Category I, Reg. No. CAT-I/288/1995, registered under Section 34AB, and has practised as a valuer in Delhi since 1993.

What is an IBBI registered valuer?

Section 247 of the Companies Act, 2013 requires that where a valuation is needed under the Act, it be done by a Registered Valuer. The Companies (Registered Valuers and Valuation) Rules, 2017 set out how valuers qualify, and the IBBI is the authority that registers them. Registration is by asset class: land and building, plant and machinery, and securities or financial assets.

To register, a person must be a member of a Registered Valuers Organisation recognised by the IBBI, complete the educational course and pass the valuation examination for the asset class. IBBI registered valuers are needed for valuations under the Companies Act, such as for mergers, preferential allotments and other company transactions, and for valuations in insolvency proceedings under the Insolvency and Bankruptcy Code, 2016.

What is a bank panel valuer?

Each bank keeps its own panel of valuers for loans against property, home loans, project finance and recovery cases. The bank sets its own conditions for empanelment, which may include qualifications, years of experience, professional memberships and, in some banks and for some categories of loan, IBBI registration.

A bank panel valuer's report is accepted by that bank. Another bank will usually want a report from a valuer on its own panel. If you are applying for a loan, ask the bank for its current list rather than engaging a valuer first.

Bank valuations are also written for a different reader. Along with the fair market value, a bank report usually gives a realisable value and a distress sale value, and comments on the title documents, approvals and marketability of the property, because the bank is assessing it as security for a loan.

Which valuer do you need for which purpose?

The list below is a general guide. The authority or institution that will rely on the report has the final say, so check with them, and with your CA or lawyer, if you are unsure.

• Capital gains, FMV as on 1 April 2001, cost of improvement, gift valuation and income tax assessments: a valuer registered under Section 34AB of the Wealth Tax Act (CBDT approved valuer)
• Valuations required under the Companies Act, 2013 and under the Insolvency and Bankruptcy Code: an IBBI registered valuer for the relevant asset class
• Home loans, loans against property and other bank lending: a valuer on that bank's panel
• Visa and immigration applications: usually a govt. approved valuer, though the consulate's checklist decides
• Court matters, partition and family settlements: as directed by the court or agreed by the parties; a govt. approved valuer's report is commonly used
• Structural stability certificates in Delhi: not a valuation at all; this needs an MCD licensed structural engineer

How do you verify a valuer's registration?

Start with the report itself. A proper valuation report states the valuer's name, the registration under which it is signed, the registration number and category, and carries the valuer's signature and seal.

Be careful with reports that only say "approved valuer" without naming the registration, or that give a number without saying which authority issued it. If a report is going to an income tax officer, a court or a company's auditors, they may check the registration, and a report signed under the wrong one may have to be redone.

• IBBI registered valuers: search the public register of registered valuers on the IBBI website by name or registration number, and check the asset class
• CBDT registered valuers: ask for a copy of the registration certificate under Section 34AB and check the category matches the asset being valued
• Bank panel valuers: ask the bank branch or its credit department to confirm the valuer is on its current panel
• Professional memberships, such as Fellow of the Institution of Valuers (FIV), can be confirmed with the institution

Can one valuer hold more than one registration?

Yes. A valuer may be registered with the CBDT, registered with the IBBI and empanelled with several banks at the same time, and many experienced valuers hold a combination. What matters is that the report you receive is signed under the registration that your purpose requires.

Engineering qualifications also matter for property. Er. B.P. Singh is a civil engineer, a Fellow of the Institution of Valuers (FIV), a Fellow of the Institution of Engineers (FIE) and an MCD licensed structural engineer (Lic. E-1138). His valuation registration is with the CBDT under the Wealth Tax Act.

Getting a valuation report from Royal Chambers of Engineers

Tell us what the report is for and who will rely on it, so the right registration and format are used. The work involves a site inspection, a review of your documents and a signed report with the valuer's registration details. If the purpose needs a registration the practice does not hold, we will say so at the start.