NEW DELHI: Under-valuation of commercial and residential properties in the Capital during sale and purchase is all set to be curbed with the Delhi Government preparing itself for implementation of the minimum circle rates regime for registration of properties from October this year on the pattern of what is presently prevailing in Noida, Ghaziabad and Gurgaon.

According to highly placed sources, the matter, pending for months due to differences between the Delhi Government and the Municipal Corporation of Delhi on the stamp duty rate to be charged for registration, has been sorted out amicably and will now be placed before the Delhi Cabinet next week for final clearance and approval. At present, registration of properties is divided into two categories.

While women are charged 6 per cent stamp duty, the property registered in the name of a male is charged at 8 per cent. While in the case of women the Delhi Government gets 3 per cent share and the MCD the remaining 3 per cent, in the case of males the Delhi Government gets 5 per cent and the cMCD 3 per cent.

In view of directions from the Union Government that all States work towards reducing the stamp duty and make it rational and reasonable, the Delhi Government decided to reduce the stamp duty.

However, it was felt that in view of the high undervaluing of property in Delhi the Government should introduce a minimum registration rate for various areas so that authorities do not lose out on revenue and the property transactions are made to look more genuine and add more revenue to the Government coffers.

However, this move met with strong opposition from MCD that refused to reduce its share in the stamp duty structure and said it cannot afford to lose money earned from such registrations.

The matter was referred to a Cabinet sub-committee headed by Finance and PWD Minister A.K. Walia and Revenue Minister Raj Kumar Chauhan who are understood to have talked to the MCD leaders and officials and now sorted out the matter.

Under the proposed new pattern, the registration rate for properties in the case of women would be brought down to 4 per cent in which the Delhi Government and the MCD will have 2 per cent share each and in the case of males it will be brought down to 6 per cent with the Delhi Government and the MCD having 3 per cent share each.

"We are expecting that the new circle rates will come into effect from October this year as after Cabinet approval the file will have to be approved by the Lieutenant-Governor for a final notification. The Cabinet is likely to take up the matter next week as all things have been worked out but I cannot disclose the details,'' Mr. Chauhan remarked.

Increase in revenue

Officials said the Government is expecting a massive increase in revenue due to introduction of the new circle rates. At present, the Delhi Government is earning around Rs. 900 crores per year and this is expected to touch at least Rs. 1,500 crores with the introduction of the new regime.

The new circles rates will be based on the Unit Area Method of house tax under which the properties will be divided into various categories and charged minimum rates according to the listing of the area.

Printer friendly page  
Send this article to Friends by E-Mail