Govt falls back on stamp duty

The scheme also charges a minimum fine of Rs 300 if stamp duty is paid within 60 days from the date of order, 0.5 per cent per month if paid between 60 days and four months and one per cent if paid between four months and six months from the date of execution of the document. Moreover, apart from flat owners, owners of garages, shops and warehouses have will have to pay stamp duty as well.

The duty will have to paid on a market value as has been pegged by the state. But critics say there is every chance that the agreement value of the property is muchlower than its market value. Yet, the owner will have to pay as per the market value as has been mentioned in the state8217;s Ready Reckoner list, which reads much higher than today8217;s depressed rates.

8220;The demon called market value was born on July 4, 1980, and has turned a major now8221; quipped Vinod Sampat, honorary secretary of the Registration Fee and Stamp Duty Payers8217; Association. The government is way off the mark when it comes to property rates, and its inflated rates are one of the major reasons why people have not been paying up stamp duty in the first place, he pointed put. 8220;Add to this the penalty of two per cent per month for stamp duty defaulters for the period of default makes matters worse. For instance, if a person has to pay Rs one lakh as stamp duty for a flat purchased in 1986, with a penalty imposed, it would now be almost Rs three lakh.8221;

The 1997-98 recovery figures for the state reveal a collection of Rs 1,658 crore. Collections have been high for the past four years even though themarket has been depressed, added Sampat. Both the earlier schemes had failed to elicit a good response, and at that point, the governments had blamed the depressed market. Real estate agents are wondering if the market is any different now, as recession has hit the construction industry in a big way.

Considering that stamp duty payers have little choice in deciding the taxable amount, analysts identify two motives behind the government8217;s move: To generate much needed revenue to fill its coffers; and to make a populist statement by dropping the steep penalty.

Though no figures are available with the government about the number of defaulters, stamp duty authorities have mailed a detailed questionnaire to 14,000 registered cooperative housing societies in the city. Sent three months back, the notice asks for a complete list of flat owners, the name of buyer and seller, built-up area of the flat and the agreement value when the transaction was done.