Land pooling needs simple transactional procedures
If a provision is made to exempt stamp duty at the time when DDA returns land to the owners, it will make the land pooling policy more acceptable
In September 2013, land pooling as an alternative to land acquisition for promoting housing development in the National Capital Territory- Delhi was notified by the ministry of urban development and incorporated as Chapter 19 of the Master Plan for Delhi 2021. Draft regulations for operationalisation of the land pooling policy are currently awaiting approval from the ministry of urban development.
The basic premise of the PPP model of land pooling would involve consolidation of numerous land parcels by a group of land owners or by a developer entity as the case may be, in accordance with norms to be prescribed. The owners/ developer entity would then be required to surrender their ownership rights in the consolidated land parcels in favour of the land pooling agency (i.e. Delhi Development Authority), which would later transfer ownership rights of part of the land back to the land owners for undertaking development of such areas. Each land owner would get an equitable return, irrespective of land uses assigned to their land in the zonal development plan, with minimum displace- ment. Land to be returned to the owners would fall within 5 km radius of the pooled lands, subject to planning requirements. In case of fragmented land holdings coming forward for land pooling in the same planning zone, land would be returned in the vicinity of largest land holding within the same zone. DDA’s role would essentially be that of a facilitator to speed up integrated planned development in the proposed urbanisable areas of urban extensions for which zonal plans have been approved.
The issue of stamp duty implications on the surrender of land to DDA and subsequent transfer of land from DDA has been long pending clarification. L a n d o w n e r s h av e b e e n apprehensive of the stamp duty implications at various stages of the land pooling process. As hefty amounts towards stamp duty and registration fee would have already been borne by a land owner at the time of purchasing the land parcel, it remains unclear whether stamp duty would also be payable by a land owner at the stage of surrendering his/her ownership rights in such land parcel in favour of DDA.
In a welcome move, the department of revenue, government of Delhi has issued a notification dated 13.01.2015, exempting stamp duty payable under the Indian Stamp Act, 1899, in respect of the first transfer of pooled agricultural land parcels to DDA. Hence, any surrender of consolidated land parcels by land owners in favour of DDA, in accordance with the land pooling policy and prescribed norms, shall not be chargeable to stamp duty. This step would ensure smooth and successful implementation of the land pooling model. However, the benefit of stamp duty exemption in this notification is currently limited in scope as the notification does not specify the stamp duty implications and exemptions (if any) subsequently payable at the time of transfer back/return of land by DDA in favour of land owners/DE. Provision of a similar stamp duty exemption at the time of transfer back/return of land by DDA in favour of land owners would no doubt be a financial incentive for landowners’ to come forth for participating in land pooling. Currently, further clarification on this aspect by the government of Delhi is awaited.