Maharashtra is considering reducing stamp duty on real estate from 5 per cent to 2 per cent in order to give a boost to the industry.
In March this year, the new government, in its maiden budget, announced a 1 per cent cut in stamp duty in an effort to breathe new life into the sector, which has been battered by the economic downturn and the pandemic.
Industry leaders have made representations to the government seeking reductions in stamp duty as well as ready reckoner rates. The government recently appointed a committee, under the chairmanship of HDFC head Deepak Parekh, to make recommendations to boost the sector. One of its recommendations was to cut stamp duty by 50 per cent.
The stamp duty is the largest revenue earner for the government, after GST and sales tax and VAT. In 2019-20, the state earned Rs 29,500 crore through stamp duty. In 2020-21, it expects to raise only an additional Rs 500 crore.
The finance department is opposed to any cut in stamp duty, as it fears that would further erode the state’s precarious financial condition.
According to research firm Liases Foras, only 6,396 units were sold in Mumbai Metropolitan Region in the first quarter of the current financial year – a drop of almost 62 per cent compared to the same period last year.
Niranjan Hiranandani, president of the National Real Estate Development Council, said a cut in stamp duty will not reduce government revenues. “If the real estate industry picks up, various allied industries will also get a boost and the state’s income will increase,” he said.
Chief Secretary Sanjay Kumar told Mumbai Mirror: “The state government is trying various ways to prop the real estate sector and one of them is reduction of stamp duty. The proposal is under discussion.”
Source: MumbaiMirror
