The Maharashtra Chamber of Housing Industry (MCHI) has urged the State Government to reconsider the proposed amendment to calculate transfer of the long-held tenancy rights of house properties in Mumbai at ‘market value' as against the Ready Reckoner concept.

The Mumbai-based real estate developers' association, comprising over 1,500 members, said the government's proposed move would only encourage corrupt practices.

MCHI was reacting to the budget proposals by the Maharashtra Deputy Chief Minister and the Finance Minister, Mr Ajit Pawar, in the State Assembly.

Discretionary powers

Mr Sunil Mantri, President, MCHI, said, “The proposed amendment to change the concept of market valuation is likely to give discretionary powers to the government official who determines the market value and may encourage corrupt practices in the system, since there is no basis available to fix the market value of tenanted premises.”

He said such discretionary powers can be used unilaterally since there is no counter responsibility / accountability on the officials. And, in case of dispute over the valuation, the buyer will stand to lose.

MCHI said the Ready Reckoner is a published document of the Government of Maharashtra wherein the minimum prescribed stamp duty is required to be paid based on the Ready Reckoner valuation.

As per 2011 Ready Reckoner for transfer of tenancy, stamp duty is charged at Rs 2,000 a square metre of area of the premises for the purpose of non-residential use, while the duty is charged at Rs 200 a sq mt of area of premises in the case of residential use.

In case the transaction value is more than the Ready Reckoner value, the buyer has to pay the stamp duty on the higher valuation.

However, in the budget presented by the Deputy Chief Minister (Finance), instead of going for the Ready Reckoner valuation, the Government has proposed an amendment to levy stamp duty on market valuation.

Related Topics
comment COMMENT NOW