The Hindu Business Line : TN Govt makes reduction in stamp duty

THE Tamil Nadu Government has announced changes in the stamp duty structure following the recommendations of the Tax Reforms and Revenue Augmentation Commission headed by Dr Raja Chelliah.

The 2004-05 Budget, presented today by the Finance Minister, Mr C. Ponnaiyan, said the stamp duty on property transactions within the family through various instruments would be reduced to 1 per cent of the market value of the property subject to a ceiling of Rs 10,000. The registration fee would be 1 per cent with a ceiling of Rs 2,000.

In the case of partition, the ceiling would be applicable to each share. In the case of partition involving agricultural lands, the present concessional rates would continue.

At present, property transactions within the family take place through settlement, release, partition and dissolution of partnership. In respect of settlement and release between family members, the stamp duty is charged at 4 per cent on the value set forth in the document. In the case of partition, the duty is 2 per cent.

In the case of partition on the dissolution of partnership, the stamp duty is 3 per cent on the market value of the separated share. In addition, the registration fee in each case is 1 per cent without any ceiling.

The Raja Chelliah commission had recommended reduction of stamp duty rate to 1 per cent subject to a ceiling of Rs 2 lakh.

Mr Ponnaiyan said the stamp duty on simple mortgage without possession was being reduced from 4 per cent to 1 per cent with a ceiling of Rs 20,000. The registration fee would be 1 per cent subject to a maximum of Rs 5,000. In the case of mortgage deed with possession, the stamp duty was being reduced from 6 per cent on the loan amount to 3 per cent.

The transfer duty would be reduced from 2 per cent on the loan amount to 1 per cent. The total rate thus would be 4 per cent on the loan amount. The registration charges would continue to be at 1 per cent of the loan amount subject to a maximum of Rs 2 lakh.

Another important instrument of transaction with financial institutions was the deposit of title deeds. To encourage the proper registration of these transactions, the Government proposed to include Note or Memorandum or any other instrument to be also dealt with as deposit of title deeds.

The present rate was 0.5 per cent stamp duty and 1 per cent registration fee on the loan amount, which would be continued. However, a ceiling of Rs 5,000 for stamp duty and Rs 1,000 for registration fee would be introduced. This would enable registration of these documents easily.

The Minister said it was proposed to rationalise the duty structure on lease, which was another widely used instrument. The proposed structure would be on the total rent and premium or fine or advance, if any, payable.

For a lease period below 30 years the proposed rate would be 1 per cent; for lease period between 31 years and 99 years the rate would be 4 per cent; and for 100 years and above the rate would be 8 per cent. The registration fee would be a common rate of 1 per cent of the total rent and premium or fine or advance subject to a maximum of Rs 5,000.

Power of Attorney for consideration was another instrument. The existing rate of 6 per cent stamp duty was high because of which power of attorney was not generally registered. This could be misused causing hardship to buyers.

This could be corrected by buyers insisting on registered power of attorneys. To facilitate this, it was proposed to bring down the rate from 6 per cent to 4 per cent. The registration fee would continue to be 1 per cent.

More Stories on : Budget | Taxation | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page