Nominal ₹100 stamp duty for PAAAs of redevelopment projects

However, if a co-operative housing society member is purchasing additional carpet area from the developer, the normal stamp duty will be applicable on the additional carpet area

Mumbai: In line with the Bombay High Court judgement of February 2023, the Inspector General pf Registration and Controller of Stamps has issued a notification that Permanent Alternative Accommodation Agreements (PAAAs) of redevelopment projects will be charged a nominal stamp duty of ₹100 as per section 4 (1) of the Maharashtra Stamps Act.

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On February 17, 2023, a division bench of Bombay High Court had revoked circulars issued by the revenue authorities on June 23, 2015, and March 30, 2017, and had ruled that PAAAs should not be charged stamp duty as per normal process, and only ₹100 should be charged as per section 4 (1) of the Maharashtra Stamps Act.

The Inspector General of Registration Hiralal Sonawane said in the circular issued on Wednesday that as per court’s directions, if societies which have already signed development agreements based on the construction undertaken need to pay only ₹100 on PAAAs as per section 4(1). If society members are getting additional carpet area free in their homes, they can pay ₹100 as stamp duty as per section 4(1).

“If a co-operative housing society member is purchasing additional carpet area from the developer, the normal stamp duty will be applicable on the additional carpet area,” the notification said, adding that the previous circulars dated June 23, 2015 and March 30, 2017 have been scrapped.

Reacting to the development, Amit Jain, CMD, Arkade Group said, “The Maharashtra Government’s decision is highly appreciated, as it has effectively addressed the ambiguity surrounding PAAA (Permanent Alternate Accommodation Agreement) stamp duty charges. This clarification brings much-needed clarity to both societies and their members, facilitating a faster process of society redevelopment. Moreover, it comes as a relief for senior citizens who were previously burdened with the need to visit the registration office twice to avoid paying the additional duty.”

“The potential for redevelopment is significant in various micro markets, including areas in Mumbai’s eastern and western suburbs like Vile Parle, Borivali, Santacruz, Malad, Andheri, and others,” Jain said.

Dhaval Ajmera, Director, Ajmera Realty & Infra India Ltd and secretary of CREDAI-MCHI also welcomed the decision. “This move by the Maharashtra Government will be of immense benefit to redevelopment projects. Mumbai Metropolitan Region is home to a large number of old housing societies with buildings in dilapidated conditions awaiting redevelopment. This welcome move will now expedite the process and encourage other societies in need of redevelopment to take the next step.”

“Overall, this is a positive step taken by the Government that will be beneficial for both tenants and developments. As an outcome, the process of redevelopment will get cheaper and faster, benefiting many housing societies in MMR and enabling a quality lifestyle for many.”