Slash in stamp duty to 2% to boost real estate sector, State revenue

| | BHUBANESWAR
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Slash in stamp duty to 2% to boost real estate sector, State revenue

Thursday, 09 September 2021 | PNS | BHUBANESWAR

With the passage of the Indian Stamp (Odisha Amendment) Bill, 2021 in the State Assembly on Wednesday, it will give the much-needed boost to the real estate sector, besides augmenting revenue generation of the State by way of growth in collection of direct taxes such GST, stamp duty and registration fees, etc.

As per extant provisions of Indian Stamp Act, for an agreement to sell involving delivery of possession of any immovable property or a power of attorney, authorising the person other than family members, to sell such immovable property, stamp duty of 5% is being collected on the basis of the market value of the property.  

However, representations were received by the Revenue Department from various stakeholders to reduce the stamp duty on agreement to sell and power of attorney.  Besides, when high stamp duty is prevalent, it encouraged a tendency to evade registration of such documents. In last seven years only 0.02% of sale agreement documents with possession of property and 0.14% of power of attorney with possession of property have been registered in Odisha.

A real estate promoter/developer requires two types of documents executed between the developer and the land owner, viz. a power of attorney giving absolute power to the developer to sell the property to the public after the development/ construction of any structural complex and development/ construction agreement with the land owner with possession of property for necessary development of land/ to construct any residential/commercial complex over the land.

 The stamp duty on such documents is charged at par with sale deed i.e. 5%. Such increased financial burden is ultimately passed to the public thereby increasing the cost of the developed land and buildings. As per the amended provisions, in agreement to sell / development agreement /construction agreement involving delivery of possession and power of attorney authorizing the person other than family members to sell immovable property, stamp duty of 2% will be leviable.

When evelopment Agreement and Power of Attorney are executed between the same parties involving the same property, and 2% stamp duty is paid on Development Agreement, then only a nominal amount of Rs1,000 stamp duty will be paid on power of attorney. When power of attorney is given to family members such as father, mother, wife, husband, son, daughter, brother and sister to sell or transfer immovable property, stamp duty of Rs 1,000 is paid.

Through the present amendment, five more relations such as daughter-in-law, grandson, granddaughter, grandfather and grandmother are added within the scope of family members for execution of power of attorney for sale of any immovable property within State. For certified copy of previously registered document, stamp duty has been hiked from Rs 10 to Rs 100 to augment revenue for State.

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