Revaluation Reserve

Tax Glossary Definition

Revaluation Reserve

A revaluation reserve is created when the carrying value of an asset is increased to reflect its current market value. This reserve is part of shareholders’ equity and does not affect profit until the asset is sold, at which point it may impact capital gains computation.

Example: Land originally valued at ₹80 lakh is revalued at ₹1 crore, creating a revaluation reserve of ₹20 lakh.

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