Punjab passes Stamp Bill, reduces duty by 1 per cent

In a late night development yesterday, the Punjab Legislative Assembly passed the Indian Stamp (Punjab Amendment) Bill 2007 to bring down the stamp duty from 6 per cent to 5 per cent.

It is felt the move is likely to trigger some momentum for the plunging stamp duty collection in the state, which has dipped over 23 per cent.

Earlier, during the Budget speech this year, Punjab Finance Minister Manpreet Singh Badal proposed to reduce the basic stamp duty rate from 6 per cent to 5 per cent following the recommendations of the Planning Commission.

It is worth noting noting that after the VAT, stamp duty is the second major source of revenue for the state government.

The fall in the income from stamp duty is a major worry for the state.

Even in the first quarter this fiscal, the state government has received a major jolt from the stamp duty sector. There has been a steep fall of 30 per cent in the revenue from stamp duty during the first quarter of the current fiscal year.

The collection of revenue in the first quarter this year was Rs 427.48 crore whereas it was Rs 611.50 crore during the corresponding period last year. In fact, the finance department has been expecting an increase of 25 per cent in the revenue from stamp duty and registration this financial year.

It has pegged the collection from stamp duty and registration at Rs 2,200 crore during the current fiscal year while last year it was Rs 1,800 crore.

Property analysts feel that the reduction in stamp duty by 1 per cent is likely to boost the sale and purchase of property in the state, thus increasing the state's revenue from stamp duty.

Speaking to Business Standard, Mangat Rai of Subhash Mangat Property Dealers said, "This is indeed a good move by the state government. The purposed cut by 1 per cent will curb the black money which is being circulated in the market. The higher rate compelled thousands of buyers to devise means to evade stamp duty and go in for transactions through dubious means. So, personally I feel that the cut will boost the registration and people will opt for fair means by investing white money instead of black. Further, it will help in boosting the state's revenue from the stamp duty."

He also pointed out that the move will further push the real estate sector in the state.

It may be recalled here that the Chandigarh Administration in May this year had already reduced stamp duty from 6 per cent to 5 per cent on the sale deeds of immovable property.