Stamp duty on mill lands to rise 500%

From January 1, 2007, the stamp duty for those buying flats, shops and offices coming up on textile mill lands - which were recently sold to private developers by inviting open tenders - will shoot up by a whopping 100 to 500 per cent, with the Maharashtra government increasing the market value of all such properties in its Ready Reckoner. Meanwhile, the stamp duty burden on purchase of residential and commercial property throughout Mumbai is all set to increase by 5 to 25 per cent. The Ready Reckoner, published by the Inspector General of Registration and Stamps, has also revised the market rates of land in Mumbai by almost 70 per cent. The stamp duty is calculated based on these market rates. The market rates were determined after studying 80,000 documents - the largest sampling of documents so far - said Rajesh Mehta, chairman, Raha Realtors. Kohinoor Mill No 3 has witnessed the steepest rise in market value of its property in the Ready Reckoner - its land price is now up by 520 per cent and stands at Rs 1,81,500 per square metre.

The rates have risen by 477 per cent for residential purposes, pegged at Rs 2,90,000 per square metre. The market value for office space here has gone up by 553 per cent and stands at Rs 3,62,500, while the prices for shops have risen by 517 per cent and are pegged at around Rs 4,35,000. Similarly, the prices of land, residential, shop and office premises at Elphinstone Mill has been hiked from anywhere between 227 to 364 per cent and the prices have accordingly risen between Rs 1,40,600-3,37,500 per square metre. For Mumbai Mill, Madhusudan Mill and Bharat Mill, the rise is anywhere between 178-329 per cent and prices have been revised up to Rs 1,04,500-2,50,000 per square metre.

Jupiter Mill is another example, where prices have gone up by 50-110 per cent. In the case of other mills, including Jam Mill, United Mill No 1 and Finlay Mill as well as Kohinoor Mill No 1, the price rise is a moderate 5-25 per cent, which matches with the average price hike. An above-average price hike has also been noticed for land at Andheri (East), which has emerged as an important business district. In the areas such as Mogra, Marol and Kondivita, the land price rise in the Ready Reckoner is anywhere between 60 to 70 per cent. "The high market value will increase the capital gains tax burden, as the Ready Reckoner prices are treated as a base by the income tax department under Section 50C of the Income-Tax Act," explained Mehta. The other changes include an increase in depreciation benefits for old properties. However, in the case of properties using Transferable Development Rights (TDRs), there is a separate formula that is used in the Ready Reckoner, whereby 40 per cent will be added to the market value of the main property.

E-stamping project gets seal of approval

Five to seven minutes, that’s all it will now take to pay stamp duty in India. For, the Revenue Department has put its stamp of approval on an electronic stamping project which does away with stamp papers altogether. According to Revenue Department officials, a pilot e-stamping project is scheduled to kick off in Ahmedabad and Gandhinagar this week. It will be replicated across the State over the next six months, they say. They also claim that Gujarat’s will be the first e-stamping project in the country and the third in the world.

Under the new system, applicants would need to pay money to authorised centres of the Stockholding Corporation of India, the agency deputed by the Central Government for the project. On making the payment, they will be handed a certificate. “The certificate will have a unique identification number, watermark and a hologram with bar code. It will also show the name of the customer, address, amount paid and the type of document. All these measures would prevent duplication and make stamp paper scams redundant. Apart from the fact that it cannot be misused, the system will make the entire process simpler and quicker,” says Gujarat Stamps Commissioner Vinay Vyasa.

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The e-stamp may be used in lieu of stamp papers in property deals, legal agreements, licenses, mortgaging, and other judicial documents that require stamp papers of Rs 100 or more as of now, he says. The same may also be produced in courts as proof of duty paid for the transactions, say Revenue Department officials.

Among other things, those who need to pay stamp duty will be able to do it irrespective of banking hours. Officials inform that completing formalities will take all of 5 to 7 minutes under the new change in the property law in India. “With the e-stamping system in place, the shortage of stamp papers would be a thing of the past,” say revenue officials.

http://cities.expressindia.com/fullstory.php?newsid=221131

CREDAI - need of stamp duty exemption for housing!

Property Laws in India have been carried to a point where there is a need of several modifications in laws affecting property transactions and consequently development process in various sectors.

In keeping with its promise to promote low cost housing across India, the Government should offer exemption in excise duty on building raw material besides urging states to exempt first time housing buyers from stamp duty, an apex body of real estate developers said keeping in mind the existing immovable property laws in India In a pre budget memorandum submitted to the Finance Ministry, Confederation of Real Estate Developer's Associations of India (CREDAI) said that on the pattern of Special Economic Zones, the Government should offer exemption from Excise and Sales Tax on the building raw material and from Stamp Duty (on first allotment) for slum area development and low cost housing projects. It stated that high stamp duty rates in many states were adversely affecting the housing sector. At present, the states are charging up to 15 per cent of stamp duty on the transfer of property, leading to rise in prices. The builders’ body also demanded exemption from service tax for builders developing projects on their own account. CREDAI suggested that rental housing stock investment allowance at 20 per cent, rental income from newly constructed houses with area of each unit not exceeding 150 sqm be completely exempted from income tax for first five years and at the rate of 50 per cent for next 5 years. So guys, has now the time come for actual amendments in Indian real estate laws keeping in mind the need of development of various areas. I think our governmental authorities should now think of all these aspects of development too.