The Free Press Journal

Stamp duty cut to pinch

Maharashtr­a Govt expects Rs 8,000cr fall in collection by end of 2020-21

- SANJAY JOG

The Maharashtr­a Government’s move to cut stamp duty to 2 per cent from September to December 2020 and to 3 per cent from January to March 2021, may impact its collection of stamp duty and registrati­on fees by about 30 per cent (approximat­ely Rs 8,000 crore) by the end of fiscal 2020-21. Against the total collection of Rs 28,989.29 crore in 2019-20, the government is likely to mop up about Rs 8,000 crore less for 2020-21.

A senior official of the revenue department admitted that the government had decided to reduce the stamp duty to boost the real estate sector, which is passing through a difficult phase due to the economic downturn and the lockdown. He further informed, the stamp duty cut was applicable only for agreement for sale and not for other transactio­ns.

‘’The stamp duty and registrati­on fee collection was worth Rs 28,989.29 crore for a total 28.22 lakh agreements for fiscal 201920. Already the collection has been adversely impacted because of the Covid-19 crisis and the lockdown, as it was a paltry Rs 273.39 crore in April against Rs 1,603.19 crore for the correspond­ing period last year, Rs 414.75 crore in May against Rs 1,776.78 crore during the same time last

year. After the ' unlocking' in June, there was a marginal increase, to Rs 1,260.54 crore against Rs 2612.69 crore last year, Rs 1,309.92 crore in July against Rs 1,898.49 crore. As on August 25, the collection has been Rs 1,212.18 crore against Rs 1,856.58 crore for August 2019,’’ said the official.He said Mumbai, Thane, Pune and Nashik are high revenue collection divisions. "Although the government has cut stamp duty property buyers are facing a financial crunch and unless and until they have money to pay EMIs, they will not purchase. On the other hand, there is this view in the department that stamp duty reduction will boost property registrati­on and the government can make up some of the revenue loss in the current fiscal,’’ he noted. A senior MVA minister however, wanted builders and developers to reciprocat­e, by reducing property prices and thereby passing on the benefit to buyers. Anand Gupta, Chairperso­n of Housing and RERA Committee of Builders Associatio­n of India, said, as the stamp duty reduction is timebound, it will induce buyers to purchase property in that particular time, to take advantage of the reduction. ‘’As the move is to boost real estate, this reduction should only be for underconst­ruction property, otherwise buyers may opt for resale properties and completed projects. In the end, the government may not succeed in boosting real estate,’’ he opined.

Newspapers in English

Newspapers from India