Maharashtra to revise Ready Reckoner rates from April 1

Prevailing rates to continue till March 31, 2016 as the state government amends rules

The BJP-led government in Maharashtra has given a New Year gift to property buyers in the state. In a major policy shift, the government today took a decision to revise the Ready Reckoner (RR) rates from April 1 instead of the current practice of January 1 every year. It has issued a gazette notification in this regard. 

The prevailing RR rates, with an overall average increase of 14%, which came into effect from January 1 this year, will, therefore, continue till March 31, 2016.  The rates in Mumbai and the rest of Maharashtra were ranging between 10% and 40% after they were revised on January 1, 2015.

RR is an annual statement of rates based on which the stamps and registration department collects stamp duty from property buyers. 

Business Standard had reported in June that the government had considered revising RR rates from April 1 to bring in uniformity and avoid issues with regard to tax and penalty.

The government has responded positively to a series of representations made by the realty players citing that there is a restriction on transaction happening below RR rates under Section 43 (c) of the Income Tax Act. They had argued that it has become difficult for developers to reduce property prices even if they desire so. 

Besides, legislators from the BJP and the Shiv Sena had demanded maintaining a status quo in view of the slump in the realty market and protect the interest of the property buyers.

A senior government official told Business Standard, “The government has proposed amendment to the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995. The revised rules titled Bombay Stamp (Determination of True Market Value of Property) Rules, 2015 were issued today through a gazette notification. As per rule 4, RR rates will now be revised from April 1 instead of January 1 every year.” 

The official also said the legislators and realty players had also argued that the increase in RR rates may not lead to increase in the state revenue considering the slump in the realty sector.

Lalit Kumar Jain, chairman of Kumar Urban Development, said that there is a buffer time for the government to formulate policies commensurate with market conditions. “It is necessary in the interest of government to enhance revenue that current market positions (reduced sale prices) are captured in RR rates.”