Circle rate hikes fail to add to Delhi coffers

Despite hikes, the stamp and registration revenue collection have failed to even touch the 2012 figures when the Delhi government got Rs 3,098.87 crore in its coffers.

Contrary to the belief that the increase in circle rate of residential, industrial and commercial properties will increase government’s revenue, the total collection in the form of stamp duty and property registration over the past three years has failed to witness a northward trend.

New Delhi: Delhi government revised circle rates four times since 2011 to improve revenue collection under the head of stamps and registration. (Sushil Kumar/HT Photo)

Circle rates are minimum rates below which a property cannot be registered and forms the basis of stamp duty and registration charges.

The Delhi government has increased circle rates four times since 2011. While it was revised twice in 2011, a steep hike of about 20% was introduced in November 2012. The last revision was done during President’s Rule in September 2014.

The steady upping of circle rates, officials said, was to bridge the gap between the government rates and actual market prices of a property.

According to the officials, the upward revision is also done to increase the government’s revenue from stamp duty and registration fee, besides checking flow of black money in the realty sector.

However, going by the statistics, the stamp and registration revenue collection have failed to even touch the 2012 figures when the Delhi government got Rs 3,098.87 crore in its coffers. While 2013 and 2014 witnessed a negative growth, stamp duty and registration fee recorded marginal increase in financial year 2015-16 with total collection of Rs 2,941 crore.

“The realty sector in the city hit a slump after 2014. Before that the sector was on a boom. The circle rates were revised on a regular basis keeping in view the market rates. While it naturally increased the property value, the revision was primarily done to check the flow of black money,” a revenue department official said.

While the circle rates were revised across all categories — A to H — the residential properties in the categories in the posh colonies felt the pinch the hardest. The colonies in the city are divided into categories from A to H, with A being the posh colonies.