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Collections on account of stamp duty and registration fees on property and capital transactions across India could be more than doubled and be raised to about Rs two lakh crore through an innovative approach, progressive policy and greater transparency together with streamlining the system for convenience of masses, an ASSOCHAM study said.
“Maharashtra alone accounts for over 20% of both stamp duty/registration fees and overall taxes on property transactions as the state has largely streamlined compliance and tax administration in this area, thereby curbing evasion,” said a study titled ‘Trade Policy & Tax Regime: State Level Initiatives’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Other smaller states including Delhi, Kerala, Haryana and Punjab too maintain robust collections on this account, which is reflective of the real estate industry in the respective states, highlighted the ASSOCHAM study while suggesting that Maharashtra’s pattern should be studied by other states and adopted with necessary modifications.
“With property prices skyrocketing in most metropolis and price of agricultural land too rising sharply in recent past, a progressive policy in this regard is the need of the hour,” said DS Rawat, secretary general of ASSOCHAM while releasing the chamber’s study today.
“The stamp duty and registration fees on property and capital transactions form a major component in the states’ revenue basket,” said Rawat. “In India, where property transactions are often regarded as shady and undervalued to avoid payments vis-à-vis stamp duty and registration fees, an innovative approach to this aspect would result in much larger collection, besides tackling parallel economy to an extent.”
Stamp duty and registration fees have much wider ramifications in so far as streamlining and management of a very important segment of the economy, highlighted the ASSOCHAM study. Taxes on property and capital transactions cover two important aspects including stamp duty and registration fees, besides land revenue and tax on urban immovable property tax. Thus, this segment covers a very huge financial sector which determines the flow of savings, housing, land and property holding.
“Hence a very close look at various aspects of this item of revenue will ensure a greater transparency in the economy and also a steady inflow of revenue to the exchequer,” said the ASSOCHAM study. “This will also result in monitoring and administratively gathering vital data on land and property holdings both in urban and rural areas.”
ASSOCHAM has also emphasized about a pressing need for taking an all-inclusive view of the entire fiscal policies and tax structure to pep up domestic demand and make India’s exports more competitive. “Creation of an efficient and cost effective production base within the country would lead to a gradual rise in demand from internal and external markets.”
