Cuts in stamp duty, no income tax on jute, tea

WEST BENGAL BUDGET 2006

The Left loves the housing sector, if the budget presented by the West Bengal Finance Minister Asim Dasgupta today is any indication.

Dasgupta responded to the booming real estate business in the state by reducing stamp duty on property transfer in Kolkata and Howrah municipal areas by 25 per cent, making it just 6 per cent from the present 8 per cent plus 2 per cent additional stamp duty.

Property transfers in rural areas will attract a stamp duty of 5 per cent against the 6 per cent payable till now, a reduction of 1 percentage point. Dasgupta said he expected the cut in stamp duty to yield more revenue as the level of compliance would rise.

Besides reducing stamp duty on property dealings, Dasgupta exempted the state's ailing tea and jute industries from income tax in the Rs 42,000-crore maiden budget of the seventh Left Front government. The estimated deficit was Rs 6 crore.

The finance minister described the budget as one aimed at generating employment. It targeted employment generation of 700,000 in one year from the small scale sector and agriculture. "I am giving stress on SSI sector as it has the potential to create jobs," he said.

According to Dasgupta, the projected plan expenditure in the budget for 2006-07 has been pegged at Rs 8,734 crore, 24.5 per cent higher than the actual figure of the last fiscal.

The finance minister pointed out that it could go up to Rs 10,000 crore if the Centre's grants some sops in the small savings front. "We could get an additional Rs 1,400 crore if the Centre decides favourably," he said.

Elaborating on the stamp duty cut, he said at present, stamp duty payable on the transfer of property in municipal areas was 8 per cent and in rural areas 6 per cent.

It will come down to 6 per cent and 5 per cent respectively.

Besides, the additional stamp duty of two per cent now being levied under the Calcutta Improvement Act and Howrah Improvement Act would be eliminated.

"This is highly revenue elastic. Due to high rate of duty, the compliance is low. So with the slash, compliance will increase and so will the collection," he added.

According to Dasgupta, bed sheets, bed covers, pillow covers, towels, incense sticks, ghee, tea and adhesive would be cheaper after the budget, as the duty was brought down from 4 per cent to zero per cent.

In contrast, foreign liquor would be taxed at 20 per cent from the earlier 17.5 per cent, while imported cigarettes and imported sugar would be taxed at 12.5 per cent from the present 4 per cent.

Dasgupta exempted the tea industry from agricultural income tax of 30 per cent and set aside a sum of Rs 20 crore as corpus money for the Jute Development Fund.

"I want the tea and jute industries to revive," said Dasgupta after announcing the sops.