The Municipal Corporation of Delhi (MCD) has faced a delay in receiving ₹600 crore as transfer duty charges from the Delhi government for three months from April to June, multiple sources have told The Hindu.
Officials attributed the reason for the delay to procedural hurdles caused by the reunification of the three erstwhile civic bodies into one municipality — the MCD — in May.
A Delhi government source said that the process to disburse part of the amount had been initiated on Monday.
“The government is in the process of releasing about ₹200 crore due for the month of April today itself. There was a slight delay as the money earlier went to three different accounts of the three erstwhile civic bodies. After the unification of the civic body, changes have to be made to send the money to one account,” the source said.
The amount for the month of May will also be released within this week, the Delhi government source said.
A senior MCD official explained that the Delhi government collects transfer duty charges in addition to the stamp duty.
“The government retains 3.5% of the transfer duty as collection charges while the rest is given to the MCD,” the official said.
Critical revenue source
“Unlike stamp duty, the transfer duty is not the government’s income. Like property tax, transfer duty is a crucial source of internal revenue for the MCD, which is already suffering from a cash crunch,” the official added.
In June, the civic body approved a proposal to increase the rate of duty on the transfer of properties valued over ₹25 lakh, by 1%.
“The increase in the transfer duty charges and other sources of internal revenue is aimed at improving the financial health of the MCD. In the past, proposals regarding a hike in various tax rates were not approved mainly because of opposition from the councillors,” said the senior MCD official.
