A look at the effects of the reduced stamp duty

Buying and selling of a property according to the new policy.

• Mumbai, Pune and Thane – stamp duty reduced from 10 percent to 5 percent.
• Pimpri Chinchwad and other Municipal corporations reduced from 8 percent to 5 percent.
• Mahabaleshwar. Lonvala etc reduced from 9 percent to 5 percent.
• “A” Class corporation reduced from 6 percent to 5 percent.

With effect from July 1, 2004, the Maharashtra government has reduced stamp duty in the state and exempts certain types of affidavits and documents from payment of the duty.

Announced during the 2004-05 budget in the state assembly by Finance Minister Jayant Patil, the duty rates have been reduced where they exceed 5 percent keeping in view comparative rates applicable in other states.

According to the new decision, the transfer stamp duty is reduced to 5 percent from the present rate of 8 to 10 percent. “This uniform rate of 5 percent will be of great benefit to the public at large,” explained Vasant M Maske, Deputy Inspector General of Registration and deputy controller of Stamps, Head Quarters, Pune.

Municipal Commissioner and ex-Inspector General of Registration and controller of Stamp Duty, Dr. Nitin Kareer and current Inspector General Om Prakash Gupta initiated this idea of reduction.

“Cities like Mumbai, Thane and Pune paid 10 percent on Stamp Duty for conveyance of sale deeds, this reduction will cut down the cost by almost 50 percent bringing it to 5 percent. This reduction also helps Pimpri Chinchwad, which had an 8 percent stamp duty,” informs Maske.

This new stamp duty reduction will also benefit property values up to five lakhs and above for the government has also decided to make it a uniform 5 percent stamp duty rather than charge according to the old values.

“According to article 25D of Schedule I of the Bombay Stamp Act, 1958 relating to residential premises, several slabs with special rates for residential premises under ownership flat act or for the co-operative housing societies,” says Maske. “The stamp duty paid for property value up to 2.5 lakh was half percent of the value, for amount exceeding 2.5 lakh to 5 lakh, stamp duty is 3 percent plus Rs. 1,250; from 5 lakh to 15 lakh, one paid a stamp duty of Rs. 8,750 plus 8 percent of the value. With the new rule, 5 percent of the total value will be applicable for any amount,” he elucidates.

There was a vast difference between the geographical locations for leave and license 11-month rate slabs, which the new policy will help govern.

The policy has devised three slabs of payment: The new rule will also lay down a definite rate for contract agreement / sale deeds of minimum of Rs. 100 which until recently charged small denominations.

All commercial premises too will be charged 5 percent that was earlier charges 10 percent on Stamp Duty.