Is the Delhi govt los­ing crore a month?

Rev­enue losses likely as agri­cul­ture land deals are done at mar­ket rates, even though buy­ers claim to have paid cir­cle rate prices to save stamp duty

HT Estates - - FRONT PAGE - Jee­van Prakash Sharma

It’s a sim­ple move that can help the Delhi gov­ern­ment save rev­enues of at least ₹ 300 crore a month, say se­nior of­fi­cials in the state’s rev­enue depart­ment. Low cir­cle rates ( the min­i­mum prices fixed by the gov­ern­ment for sale of prop­erty for col­lect­ing stamp duty) en­cour­age peo­ple to sell prop­er­ties at pre­vail­ing mar­ket rates, take the money in black and de­clare the rest in white as per cir­cle rates. That there is a vast dif­fer­ence in cir­cle rates in Delhi is ev­i­dent from the fact that agri­cul­ture land is priced at ₹ 53 lakh per acre whereas the cur­rent mar­ket price varies be­tween ₹ 2.5 crore to ₹ 50 crore per acre.

In Fe­bru­ary this month, Mohit Sharma (name changed), a res­i­dent of Gur­gaon, bought 12 acres of agri­cul­ture land i n t he K- I I zone of Delhi, which comes un­der the Delhi Devel­op­ment Author­ity’s (DDA) pro­posed land-pool­ing zone. The ac­tual cost of land, when cal­cu­lated at the mar­ket rate of ₹ 12 crore per acre, was ₹ 144 crore. How­ever, the sale deed which the land owner (a farmer) ex­e­cuted in favour of Jain men­tioned a price of just ₹ 6.36 crore – which was paid by Jain in cash. The rest of the pay­ment was in black.

Go­ing by the ac­tual trans­ac­tion, Jain would have had to pay ₹ 8.64 crore as stamp duty, but he paid just ₹ 38 lakh for the amount in white. The money he saved on the trans­ac­tion was about ₹ 8.26 cr – which would have oth­er­wise gone to the Delhi gov­ern­ment.

“The state gov­ern­ment’s rev­enue depart­ment col­lects 6% of the cost of prop­erty as stamp duty. When cir­cle rates are low, buy­ers and sell­ers in most cases de­clare prop­erty prices around such rates and not the ac­tual sale price be­cause that means they pay min­i­mum stamp duty. The ul­ti­mate loser in the whole trans­ac­tion is the gov­ern­ment,” says a rev­enue of­fi­cer posted in Ka­pashera in south-west Delhi.

Of­fi­cers posted at var­i­ous rev­enue dis­tricts in south-west, south and north Delhi ar­eas, where a huge chunk of agri­cul­ture land still ex­ists, come out with star­tling rev­e­la­tions of black money trans­ac­tions.

“Not just in the land-pool­ing zones, but also in many south Delhi ar­eas such as Asola, Dera, Fateh­pur, Sul­tan­pur, Ghi­torni etc the price of farm­houses vary from ₹ 15 cr per acre to ₹ 50 cr per acre but sale-deeds just men­tion a trans­ac­tion price of about ₹ 70 lakh be­cause farm­houses are cat­e­gorised as agri­cul­ture land,” says Vi­jay Ku­mar, prop­erty dealer in Ch­hat­tarpur.

About how he ar­rived at the loss fig­ures of ₹ 300 crore to ₹ 500 crore, the rev­enue of­fi­cial says: “Our av­er­age monthly in­come through all forms of land deals is about ₹ 200 crore. Ten per cent of this rev­enue, that is ₹ 20 crore, comes from the sale-pur­chase of the agri­cul­ture land, the cir­cle rate of which is ₹ 53 lakh per acre now. If this rate is in­creased in three to four cat­e­gories ac­cord­ing to the pre­vail­ing mar­ket prices in var­i­ous ar­eas, the av­er­age cir­cle rate will be around ₹ 10 crore per acre. This amount is 20 times more than the ex­ist­ing cir­cle rate. So the monthly rev­enue col­lec­tion from the sale-pur­chase of agri­cul­ture land will also shoot up 20 times to ₹ 400 crore (20 x ₹ 20 crore),” says the of­fi­cial.

Now the ques­tion is, when the rev­enue depart­ment is aware of the rev­enue loss due to the un­re­al­is­tic cir­cle rates, why are the rates not be­ing hiked? A se­nior gov­ern­ment rev­enue of­fi­cial re­veals that in Septem­ber 2014, when cir­cle rates of var­i­ous prop­er­ties were in­creased in Delhi by Na­jeeb Jung, lieu­tenant gover­nor, a pro­posal was made to do the same for agri­cul­ture land. “We had drawn the at­ten­tion of the LG to the prob­lem and

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