December 30, 2014 @ 11:16 AM
Expect more stamp duty and registration charges for property transactions in 2015. Developers expect ready reckoner rates to go up from 5% to 40% in January, though an official announcement will come only in the first week of 2015. They feel the hike may prove a dampener for the industry as they are already paying up to 33% income tax on a difference between the agreement value and the ready reckoner (RR) value.
The RR is the base rate of property which determines stamp duty and registration charge collected by the government.
Devang Trivedi of the Progressive group said the state was planning to increase the RR in areas, between 5% to 40%. "Builders are not opposed to stamp duty . But they as well as their buyers or investors have to pay income tax of 33% each on the difference between actual agreement and RR rate. For a Rs 1-crore property ,a tax of about Rs 7 lakh each has to be paid by the developer and buyer, besides stamp duty ," he said. Developers said such transactions mostly affect schemes in Navi Mumbai, Thane, Kalyan-Dombivli etc.
Vinod Sampat, president of the Registration Fee and Stamp Duty Payers' Association expected the RR hike to be between 20% and 25%. "Whatever the situation in the real estate sector, I don't think the government will consider a major reduction, rollback or postponement as it is the second biggest source of revenue," he said.
The state government had increased RR rates by up to 20% in municipal corporation areas of Pune, Thane, Navi Mumbai and Mumbai from January 1. But it was withdrawn partially following pressure from the builders' lobby . Developers fear this year the government might reintroduce the partial rollback. "If this happens, RR for schemes with swimming pools and other luxurious facilities will go up. This will make the deal costlier for buyers," said developers.
Source : The Times of India, Mumbai.