Cash-strapped Punjab Govt brings back stamp duty on transfer of property among family

While direct transfer from parents to children (sons and daughters) and grandparents to grandchildren will invite one per cent stamp duty, for all other transfers including between brothers, sisters, husband and wife, it would be 2.5 per cent.

Sources in the Punjab Government said the rise in stamp duty would help add a few crores of rupees to the state exchequer. “We have been observing that the transfer of property among blood relations had many takers as it did not have any duty. We observed that parents were transferring property to their children’s names and the same property was transferred back. This transfer was shown as a sale deed to mortgage it in a bank to raise a loan. At least 25 per cent of sale deeds were between blood relatives. The revenue staff was busy dealing with these transfers. With the government levying stamp duty now, only serious transfers would take place,” said a government official.

According to the notification issued by the then Punjab Government on May 7, 2014, no stamp duty was chargeable on the instruments pertaining to the transfer of immovable property by an owner during his lifetime to any of his blood relations — his children, grandchildren, brothers and sisters. The transfer between spouses was also free of charge.

In February last year, the government made home and vehicular loans dearer by levying a 0.25 per cent registration fee on the loans sanctioned by respective banks.

The government had also notified levying a 2 per cent stamp duty on property transferred through General Power of Attorney (GPA) by notifying The Transfer of Property (Punjab Amendment) Act, 2023.

The government had planned to make Rs 500 crore each from these two levies. It was targeting an additional collection of Rs 1,000 crore annually.

However, sources said that it was not looking at adding Rs 1,000 crore. Against a target of Rs 5,750 crore from stamp duty in the Budget Estimates for the current fiscal, the government has been able to collect Rs 4,172 crore till December.

While notifying duty on GPA, the government had stated that transfer of property to the spouse, legal heir, and blood relations would not attract any stamp duty.

The government stated that it had decided to levy transfer fees on GPAs as several sale deeds were executed in the form of GPAs causing a loss to the state exchequer.

The government said in October 2022 alone, as many as 7,000 GPAs were registered. Out of these, 90 per cent were related to usual sales and 10 per cent were genuine transfer of property. Roughly, this has caused a loss of Rs 850 crore.