 "Maha Govt mulls 5% increase in ready recknor rates from January 1")
The Maharashtra government mulls a five per cent increase in ready reckoner (RR) rates from January 1, instead of 15-18 per cent as planned earlier. The move is in the wake of a strong opposition from legislators, including those from the ruling Bharatiya Janata Party and Shiv Sena, against higher RR rates ahead of elections to the BrihanMumbai Municipal Corporation slated for 2017.
Realty players, too, had made a strong case for reduction in RR rates instead of resorting to any hike.
RR is an annual statement of rates on which the stamps and registration department collects the stamp duty from property buyers. During 2008-09 and 2015-16, the government has increased RR rates ranging between 10 per cent and 40 per cent in Mumbai and the rest of Maharashtra. The government's stamp duty and registration collection from 2008-09 to 2014-15 increased from Rs 8,384 crore to Rs 18,500 crore. For the current financial year, the government had planned to mobilise Rs 20,000 crore.
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A state government official, who is privy to the RR revision exercise, told Business Standard: “The government has received representations from the political parties and realty players not to go in for any revision. Some have opposed higher RR rates from January 1. They have said the higher RR will not necessarily lead to higher revenue for the government. Besides, most of the party leaders argued property buyers will be hit hard as realty players will pass on the burden to buyers. The government might, therefore, consider a marginal rise up to five per cent but not more.”
Atul Bhatkhalkar, BJP legislator from north Mumbai, confirmed he had opposed higher RR rates. “During the current economic slowdown, the property buyers will have to bear hardship. The increase in RR rates may not lead to higher revenue for the state. The government may ultimately increase RR rates very marginally,” he noted.
Shiv Sena legislator in the state council Anil Parab said his party was also opposed to any major hike in RR in Mumbai. Parab, who had taken up the issue through a calling attention motion in the upper House, added property buyers should not be further burdened with increased RR rates.
Kumar Urban Development chairman Lalit Kumar Jain said: “There is a restriction on transaction happening below RR rates under Section 43 (c) of Income Tax Act. Therefore, it has become difficult for developers to reduce property prices even if they desire so. By increasing RR rates further, the government may act against the interest of home seekers and against their own interest of collecting revenue. Any hike at this juncture will deter the housing sales further.” He suggested there should be an automatic mechanism to reduce RR rates according to the market conditions.
