The Maharashtra Chamber of Housing Industry (MCHI) today urged the state government to reconsider the proposed amendment to calculate transfer of long-held tenancy rights of house properties in Mumbai at the market value, against the Ready Reckoner concept. MCHI, a representative body of realty players, said the government’s proposed move may encourage corrupt practices.
Reacting to the budget proposal, MCHI President Sunil Mantri said: “The proposed amendment to change the concept of market valuation is likely to give discretionary powers to government officials who determine the market value and may encourage corrupt practices in the system, since there was no basis available to fix the market value of tenanted premises.” He said such discretionary powers can be used unilaterally, since the official will not have no accountability. In case of a dispute on the valuation, the buyer will suffer.”
The Ready Reckoner is a published document of the Government of Maharashtra, wherein the minimum prescribed stamp duty is required to be paid based on the valuation.
In the Ready Recknoer for 2011 for transfer of tenancy, stamp duty is charged at Rs 2,000 per sq meter for non-residential premises, and Rs 200 per sq meter in case of residential premises.
In case the transaction value is more than the Ready Reckoner value, the buyer pays the stamp duty on a higher valuation. However, the budget proposal announced by the state finance minister proposed an amendment where instead of going for the Ready Reckoner valuation, the Government has proposed to make amendments on market valuation.