Sharath S. Srivatsa
Fee for duplicate registration up from Rs. 50 to Rs. 5,000
Tax on immovable property lease has been reduced
BANGALORE: In what could provide relief to thousands of property buyers across the State, the State Government has reduced the stamp duty from 7.5 per cent to six per cent on sale of all kinds of immovable property, including agricultural land, a move that is also expected to boost the construction industry. While stamp duty on agreements and arbitration awards has increased, the tax on the lease of immovable property has been brought down.
A significant portion of the department’s revenue comes from registration of land, and the stamp duty on such transaction has been reduced due to decline in sale and transfer of immovable properties following the economic crisis.
The Stamps and Registration Department, which collected Rs. 3,630.73 crore during 2007-2008, has been able to collect only Rs. 2,757.97 crore during 2008-2009, by registering 8.7 lakh documents till January. The total expected revenue collection by the end of the financial year is Rs. 3,200 crore, a shortfall of Rs. 400 crore in revenue.
In an effort to plug loopholes and generate more revenue, a uniform tax at the rate of six per cent has been imposed on transfer of property by method of release, instead of 2.5 per cent and 3.75 per cent slabs that exist now. “This will be applicable to those properties that were jointly purchased to avoid payment of full stamp duty. Properties were being purchased jointly and later released by one of the purchasers in favour of the other, which led to payment of lower stamp duty,” an official in Stamps and Registration Department said.
Bringing cheer to those intending to lease property, the tax on immovable property lease has been reduced ranging from 3.5 per cent to 5.5 per cent depending on the tenure of the lease. “This reduction is likely to benefit a large number of commercial and residential establishments, especially in Bangalore, which are leased out,” the official said.
The Government has also decided to increase the fee for duplicate registration from Rs. 50 now to Rs. 500. Duplicate registrations are normally taken during property partition and also by those availing themselves of bank loans.