In the aid to promote the recent step of the central government, Assocham has advised the government to reduce the stamp duty on both, residential and commercial property deals that force people to hide the real value of the purchase. If implemented, this step will help the end users of both the segments of real estate.
What is the need to implement this slash?
The biggest reason that the real estate transactions witness nearly 30% to 40% cash is the higher stamp duty which accounts for 6-7 per cent or as per the charges of a state. This stamp duty varies from state to state. This can be better understood with the help of an example, suppose a property purchased accounts for Rs 1-1.50 crore then the final gets extended by Rs. 10 lakh or more due to charges like registration charges and lawyers’ fee. Therefore, in order to lower this extended value apart from the value of the real price of the property, people reveals the charges of the property lower than the actual value. But now, with the slashing of the prices, nobody will be forced to do this and thus the circulation of the cash in the real estate transaction will lower down.
Currently, even if someone is filing the income tax returns properly is forced to switch to cash in order to execute such transactions. This means that the system is forcing people to transform the white money into black and precisely nobody appreciates such acts. As per the Secretary General of Assocham, D S Rawat, if the state government promote this slashing of stamp duty by 50 percent then the outcome will only result in the increase of the revenue.