IPR Newsletter: Revision in the Rate of Stamp Duty-Sep 2020

With an intent to revive the demand in the realty sector, the government of Maharashtra reduced the rate of stamp duty on registration of property. This has resulted into a significant reduction/discount on the actual purchase price of property in Maharashtra and is welcomed by the buyers. In addition to the stamp duty, the government has also announced a waiver/reduction on the LBT/surcharge which was payable on the registration of property documents. Effects of the change: 1. On Gift of a residential or agricultural property to a relative: As per entry 34 of Schedule I of the Maharashtra Stamp Act, if a residential or agricultural property is gifted to a husband, wife, son, daughter, grandson, grand-daughter or wife of deceased son, then such gift attracted a Stamp Duty of Rupees Two Hundred Only (INR 200/-). However, the parties were liable to pay the LBT/surcharge of 1% of such gift.

As a part of the new regime, the government of Maharashtra has exempted the LBT/surcharge on the gift of an immovable property entirely for the period of September 01, 2020 to December 31, 2020. Accordingly, any gift of a residential or agricultural property to the aforementioned persons will not attract any LBT or surcharge and can be executed by simply paying a Stamp Duty of INR 200/- only. 2. On Gift of an immovable property to any other person: As per entry 34 of Schedule I of the Maharashtra Stamp Act, if an immovable property is gifted to any person who does not fall within the degree of relationships mentioned above, then such transaction attracted a stamp duty similar to what was payable on the conveyance/transfer of property.