A major relief for residents has come who are moving into their new flats in Mumbai after redevelopment, the department of registration and stamps has announced that they require not pay stamp duty.
The declaration issued by (IGR) and Controller of Stamps, N. Ramaswamy, a week ago will help flat owners save over Rs 1 lakh.
The real estate in Mumbai’s market sources said the largest beneficiaries will be redevelopment projects in and surrounding suburbs like Mulund, Ghatkopar, Chembur, Goregaon, Kandivli, Borivli and Andheri. The stamp obligation for a 2BHK house payable by each old member in a recently constructed building was around Rs 1 lakh. In general scenario, most of the times the stamp duty is paid by the house owners, but in many developers also take the responsibility of paying it.
The National Real-estate Development Council (Naredco) has been lobbying with the office of registration and stamps since some time to remove this levy. This is claimed that in circumstance of redevelopment projects, building contractors and residents were being designed to pay stamp obligation twice. The new circular pertains to paying stamps duty in Permanent Alternative Accommodation Agreement between society, developers and flat owners (tripartite agreement).
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Earlier, when this agreement was agreed by, the department levied stamps duty. This levy is based on construction cost for rehabilitation component, lease for momentary alternative accommodation paid to society or its members, corpus amount for allowing utilization of transfer of development Rights (TDR) paid to the society, transportation charges and brokerage for locating momentary alternative accommodation. On such basis as this, stamp duty is computed for redevelopment agreement and same is paid by the builder redeveloping the property.
When the builders completes the project and gives you the redeveloped building to the original residents, another tripartite contract is signed for the new premises involving the contractor, society and members. The department would again demand stamp duty on the newly constructed building established on the construction cost. Housing experts said this amounted to double obligation together been urging the department to abolish it.
A member of Naredco mentioned this anomaly to the department. If stamp duty on cost of construction has already been paid on redevelopment agreement then how can the department charge the same stamp obligation again while registration of Permanent Alternate Accommodation Contract with old members? And why should old people pay such a sizable amount of stamp duty again?
Based on the March 30 circular, stamps duty on the new premises will be relevant as per provisions of Section 4 of Maharashtra Stamp Act. The amount varies between Rs .100 to Rs.1000 for every single new flat.
The society residents or developer is now required to submit one Permanent Alternate Accommodation Contract in the collector’s office for authentication.
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