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In a bid to give relief to property buyers and consumers, the Maharashtra government plans to revise ready recknor (RR) rates from April 1 instead of January 1. This is to avoid problems faced by the buyers and sellers with regard to claims made by income tax on property transactions. Besides, the move will help address the issue of payment of huge penalties imposed on the property buyers and sellers on the ground that the transactions were lower to the RR prices.
A senior government official told Business Standard: “The proposal is at a nascent stage. It is true this has been the demand of all stake holders that RR rates be revised from April 1 instead of January 1 to bring in uniformity and avoid issues with regard to tax and penalty. The government is quite open to discuss the issues relating to its implementation and, thereafter, take a call to amend the Bombay Stamps Act.” He said RR is an annual statement of rates on which the stamps and registration department collects the stamp duty from property purchasers.
The official said the government has received representations from realty players and consumer organisations that income tax demands made by the tax authorities lead to litigations and impact property prices adversely. He added the government has agreed to involve all stake holders in the fixation of RR rates in future.
Mantri Realty chairman Sunil Mantri admitted the government's move will lead to uniformity in rates. “The government has already accepted the realty sector’s suggestion to consider the price factor in a particular area. With this, the prevalence of dual rates for income tax purpose can be avoided. Nowadays, taxation is being levied on RR rate irrespective of the actual property transaction. Bringing realistic RR rate is the most essential criteria in the coming period.”
During 2008-09 and 2015-16, the government increased RR rates ranging between 10 per cent and 40 per cent in Mumbai and the rest of Maharashtra. The government's stamp duty collection during the same period has increased from Rs 8,384 crore to Rs 20,000 crore.
