Penalty for under payment of stamp duty slashed by half
Maharashtra reduces penalty for underpayment of stamp duty on property registration from 2% to 1%, aims to recover ₹200 crore in dues. Buyers can now claim reimbursement within one year.
Mumbai: The state government has reduced the penalty for under payment of stamp duty during registration of apartments/ land from 2% to 1%. The move is expected to help the government recover dues arising from under payment of stamp duty worth more than ₹200 crore. The government has also increased the period within which buyers can claim reimbursement of stamp duty paid on cancelled deeds for flats.
A bill to amend the Maharashtra Stamp Act pertaining to these changes was passed in the legislative assembly last week. Section 39 of the Act was amended to reduce the penalty from 2% to 1%, while section 48 of the Act was amended to increase the window to claim reimbursements from six months to one year.
“There are thousands of cases where the stamp duty paid is lower than the actual rate, at times due to computational errors, but mostly due to deliberate errors in connivance with builders. Such cases come to light during verification by joint deputy registrars after registration or during audits conducted by the accountant general,” said an official from the revenue department. Once cases of under payment are identified, flat owners/ landlords/ builders are sent notices to recover dues and applicable penalties, the official added.
Earlier, the penalty was fixed at 2% of the difference between the paid amount and the actual rate, computed on monthly basis, with the penalty capped at four times the actual rate. Though the cap has been retained in the amendment, the penalty has been reduced to 1%.
“The dues for under payment of stamp duties is well over ₹200 crore. By reducing the penalty, we want to give defaulters the opportunity to settle their cases,” said the officer.
The amendment will also provide respite to hundreds of flat buyers who have not been reimbursed the stamp duty they had paid for flats whose deeds have been cancelled.
“Though the existing period to claim reimbursements is six months, in many cases, disputes drag on for much longer, giving flat buyers no time to file claims. So, we have extended the period and made the process online to help flat buyers,” said the official.
Vinod Sampat, president of the Registration Fee and Stamp Duty Payers’ Association lauded the move, saying it would help the government recover dues and reduce litigation. Stamp duty is charged based on built up area, which varies from project to project and allows ample room for disputes, he said.
“The penalty amount was very high, which would often lead to litigation. It has been made realistic now. The amendment giving more time for reimbursements was also a much-needed step,” said Sampat.