|Real estate buyers in Maharashtra will have to shell out more for stamp duty and registration as the state government has increased the market value of properties in its Ready Reckoner 2008.|
The new reckoner will be effective January 1, 2008. The government has, on an average, increased rates by 35-50% depending on the area and type of properties. Places like Kurla in Mumbai have seen an increase of 300% in land rates.
This means sellers have to pay more tax on the sale of properties, and buyers have to pay more for stamp duty and registration.
According to industry sources, the sharp increase in the property prices in Mumbai and other cities of the state prompted the increase in market value.
"As the market transactions take place on much higher price than the ready reckoner value, the move seems like bringing the ready reckoner closer to market prices and earn more revenues for the government," an industry source said.
A Mumbai-based property consultant said that though the government used to increase 10-20% of market value every year, it was higher this year as prices have doubled in parts of Mumbai and other cities in the last couple of years.
"According to section 50C of Income Tax Act, if the ready reckoner value of a property is higher than the price at which the transaction took place, ready reckoner value is taken for assessing the tax. After the new reckoner, assessee will have to pay higher capital gains tax," a tax expert said.
The market value rates are prepared by the Deputy Director of Town
Planning and the valuation department by gathering information from builders, real estate consultants, submissions made by the Joint Director of Town Planning and Valuation and from the documentations received from the offices of the sub registrar.