The government considers land in each area of a city to have a certain value – this value is referred to as the Guidance Value of land for that area in the city. It is also referred to as the official cost of land and is the minimum value at which land in that area can be registered.
For example, the Karnataka government could determine each square foot of land in Whitefield, Bangalore to have a Guidance Value of Rs.4000 per square foot.
Generally, guidance values are less than the values that the market places on the same land. But from time to time the government revises its values upwards to more closely reflect market conditions.