The stranglehold of black money on Delhi’s property market may loosen and deals may get a little more transparent soon. The Delhi government has decided to introduce circle rate — a minimum price of a property in a particular area on which registration would take place and stamp duty charged.
The Rs 18,561-crore Delhi budget, presented by state finance minister AK Walia on Monday, contains the proposal to introduce circle rates through a notification in two weeks. “Our estimates suggests that we would be able to generate an additional Rs 400 crore besides introducing transparency in the functioning of the property market,” Walia said of the measure. He said the government collected Rs 918 crore from stamp duty and registration last year.
Although Ghaziabad, Noida and Gurgaon have their circle rates, Delhi had not got its own so far leading to routine undervaluation and evasion of stamp duty during property deals in the city.
Government officials said the black-money component in each property deal — the unaccounted money paid in cash — would reduce with the new measure. And it will be easier for the honest taxpayer to acquire property with the help of bank loans, which are given on the “white component”, or the amount declared in the papers, in a deal.
“Currently, a property with a market value of, say, Rs 50 lakh is registered for about Rs 10 lakh to save stamp duty,” said a revenue officer. “If the circle rate is Rs 40 lakh, it will not only increase the government finances but also help honest buyers who do not have black money.”