Stamp duty hiked for larger transactions

NT NETWORK
Posted on 2008-09-11
PANAJI- The stamp duty has been hiked for larger transactions, quite a while after the proposal to do so had been mooted in the much-touted common man’s budget in March this year.
Now after the notification, the stamp duty rates are 2 per cent up to Rs 50 lakh; from Rs 50 lakh to Rs 1 crore, it is 2.5 per cent and above Rs 1 crore the stamp duty is a flat 3 per cent. The amount was a flat 2 per cent earlier.
For agreements it is now 1 per cent flat. From 2006 till the new notification it was Rs 100 till Rs 1 lakh, Rs 500 from Rs 1 lakh to Rs 5 lakh and Rs 1000 above Rs 5 lakh.
Even earlier (before 2006) it was Rs 15 for all agreements whatever may have been the value.
Remission of stamp duty was allowed by an earlier gazette notification.
“This hike will not effect the common people as they buy plots to build houses for themselves, which are generally valued at less than Rs 50,00,000 and so they have to pay 2 per cent. And builders can afford to pay the enhanced stamp duty,” Mr P S Bodke, the district registrar, South told ‘The Navhind Times.’
It may be recalled that the then finance minister, Mr Dayanand Narvekar had announced in his budget speech that the proposal was that stamp duty be increased to 3 per cent for properties valued above Rs 30 lakh and up to Rs 50 lakh and for properties valued at Rs 50 lakh till Rs 1 crore it was to be 4 per cent. For all the properties valued at more than Rs 1 crore, the proposal was that the stamp duty was to be pegged at 5 per cent.
The logic behind was that people from all parts of the country were investing in large transactions as the state was touted to be a safe and peaceful holiday destination with comparatively low crime rates. The unique selling point was also that the state had gained fame for its cleanliness, scenic beauty and pearly white beaches, minimal pollution and better quality of roads.
The costs of ownership including property taxes and stamp duty are also lower in Goa than in other parts. Therefore the government wanted to enhance the stamp duty rate on large transactions.
Reports say that the file on stamp duty hike had then moved by the finance ministry and according to sources the implementation of the hike in the rates announced in the budget speech was delayed as there were lot many lobbies at work.
However, this notification, say experts could do with a little bit of tweaking. For example it is seen that when amount of consideration is above Rs 1 crore one has to pay 3 per cent stamp duty. But suppose if value is Rs 1 crore and one thousand then one has to pay Rs 3, 000,30 as stamp duty.
But if one goes by the slab then the stamp duty to be paid is Rs 2, 25,030. Effectively one has to pay Rs 75,000 more for just Rs 1000. For example if the value of sale deed is of Rs 1 crore and 1000 one has to pay Rs 75,000 more stamp duty for just crossing Rs 1 crore amount by Rs 1000.
The experts feel that there should be some rectification and clarification and the notification should be properly interpreted. They added that in Karnataka and many other neighbouring states most stamp duties are according to slabs.