The age-old system of charging stamp duty on property in India based on the “ready reckoner” will be obsolete in a matter of months according a report by the Times of India.

Instead of this system the inspector-general of stamps and registration has proposed a draft where the value of a property will now be calculated using a number of different criteria. These include locational advantages and disadvantages which actually decide the true value of real estate in India.

Ramrao Shingare, who drafted this new system using the assistance of a Geographic Information System, said,

“No scientific methodology was available so far to decide a property’s real value. We felt the value of a piece of property should be based on the availability of amenities, its distance from the railway station, the scope for further development, status of title and floor-space index, among other factors. If we take all these aspects into consideration and modify the rules accordingly”

This new system will use over a dozen issues which will decide the real value of property, with those close to less attractive facilities even paying less stamp duty.

However although some property owners in India could see their stamp duty bills fall, the changes are mainly designed to lead to increasing the state’s income from stamp duty so buyers should not get too excited yet!

“If we are able to decide the real market value of the property, it will help add revenue to the state exchequer. With this aim in view, we have drafted the new microplanning project to ensure that all properties are valued properly and stamp duty charged accordingly” Mr Shingare said.

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Tags: Indian stamp duty and taxation, Indian tax, property in India

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