Stamp duty to be slashed to clean up real estate
To further intensify the crackdown on black money, Assocham has suggested the Centre to impress upon states to “drastically” lower stamp duty on residential and commercial property deals to dissuade people from undervaluing purchases.
“One of the biggest reasons for the cash forming 30-40 per cent of the real estate transactions is the high level of stamp duty. With 6-7 per cent stamp duty, purchaser of a flat worth Rs 1-1.50 crore will have to shell out different government levies and other charges like registration and lawyers’ fee to the extent of Rs 10 lakh or so.
“Likewise, the registration value also determines the capital gains tax for the sellers. With both these levies accounting for significant account, there is a big incentive for the buyers and sellers to show the registration amount as much lower than the real transaction value,” the chamber said.
“Thus, the system forces you to convert white into black. Nobody likes it, but the state governments must come forward and slash it by at least 50 per cent and the move would result in increase in their revenue rather than reducing it,” Assocham Secretary General D S Rawat said.