Maharashtra Govt announces 1% concession in stamp duty to women
Stamp duty is the tax governments place on legal documents, usually in the transfer of assets or property. Governments impose stamp duties, also known as stamp taxes, on documents that are needed to legally record certain types of transactions. The Indian Stamp Act, levies stamp duty on the Instrument and not on transactions and this fact has been upheld by many courts.
Whenever any movable or immovable asset changes hands, the buyer has to pay a certain amount of tax to the state government, to get it stamped, which is known as stamp duty. The Maharashtra Stamp Act specifies such assets and instruments on which the stamp duty has to be paid to the state government. The Act also details the amount of duty to be paid to the government. Providing relief to homebuyers, on International Women’s Day, the Maharashtra government has announced a massive reduction in stamp duty rates by up to 3%, as well as concessions for women buyers. Let us learn more about the same in this article.
Maharashtra Budget presented by Deputy Chief Minister
- Deputy Chief Minister and finance minister, Ajit Pawar presented a budget with a revenue deficit of Rs 10,226 crore in the state Legislative Assembly.
- While the revenue collection in the coming fiscal was estimated at Rs 3,68,987 crore, revenue expenditure was estimated at Rs 3,79,213 crore.
- The size of the annual plan is proposed at Rs 1,30,000 crore, the minister said.
- The tax revenue as per the revised estimates for 2020-21 is expected to be Rs 2,18,263 crore.
What is the concession provided by the Maharashtra Government?
- Maharashtra government announced 1% concession on stamp duty over the prevailing rates.
- The rebate in stamp duty charges will be provided only if the transfer of house property or registration of sale deed is in the name of a woman.
- In a joint ownership, the concession in stamp duty would not be given if there is a man as a joint owner with the woman. Both should be women.
- The concession will be given from 1st April, 2021.
What led to this concession?
- To boost the ailing real estate industry amid coronavirus pandemic, the Maharashtra government in August announced to cut stamp duty on housing units from 5% to 2% until 31 December, 2020.
- From 1st January to 31st March, 2021, the stamp duty charges were reduced to 3%.
- Mumbai, the financial capital of India, saw huge surge in property registration numbers in February, thanks to stamp duty cut by the Maharashtra government.
- Over 10,000 housing units were registered in Mumbai in February.
- In February 2021, properties worth Rs 11,745 crore were sold in Mumbai, up by 34% year-on-year.
- The total value of properties in September stood at Rs 9,025 crore; Rs 11,640 crores in October; Rs 14,395 crore in November; Rs 34,025 crore in December 2020; Rs 10,170 crore in January.
- Many of the properties sold belonged in the luxury segment. Bankers, stockbrokers and even industrialists came forward to close big-ticket real estate deals in the city.
- In a view of the above, the additional concession is a way to boost momentum.
What would be the effect of this concession?
- This concession would most definitely lead to empowerment of women. With a high number of women homebuyers seen in the past, this step will help prospective homebuyers.
- This move is also beneficial to the real estate sector because the number of women looking for property has been steadily growing.
- It will help boost demand from this segment of homebuyers. Women have become a key group of homebuyers due to more and more females entering the workforce, becoming key decision-makers
- However, due to this concession, there will be revenue shortfall of around Rs 1,000 crore
Other ways the Government has been promoting women homeownership
The government has been promoting women homeownership across the country for the last couple of years through various policies. To avail homes under the government’s flagship scheme Pradhan Mantri Awas Yojna (PMAY) introduced in 2015, properties need to be mandatorily registered either in a woman’s name or with women as co-owners. This was aimed at empowering women in the lower-income segments.
Apart from these benefits, several banks also offer discounted home loan rates to women. While this varies across banks, the difference between rates for male and female borrowers can be as much as 25 basis points. The prevailing low property rates coupled with home loans rates at a 15-year low are certainly an advantage.
Women homebuyers already enjoy the benefit of lower stamp duty across various states, although these charges vary from state to state. The exemption for women varies between 1-2% across different states. In some cases, it might even vary within a particular state, based on the classification of regions as ‘urban’ and ‘rural’.
Some other benefits announced in the Budget for Women
- The Minister announced the Sant Janabai Social Security and Welfare Scheme for women domestic workers, stating that their condition had deteriorated during the lockdown.
- He announced a seed capital of Rs 250 crore for this purpose. Various welfare schemes will be implemented for women domestic workers from this fund.
- A scheme for free travel for girl students in rural areas from their villages to schools and colleges by the Maharashtra State Transport buses in the name of social reformer Sawitribai Phule was also announced.
- He added that the state will provide 1,500 environment-friendly CNG and hybrid buses to the State Transport Corporation on a priority basis.
- The formation of the first women battalion of the State Reserve Police Force in the country was also announced.
- To empower women and children, it has been decided to reserve 3% funds from the District Annual Plan. Around Rs 300 crore will be available every year
Despite challenges, including the sharp economic slump in wake of the Covid-19 pandemic, the Maharashtra Budget presented by the state’s finance minister has focused on mobilizing resources, bolstering social initiatives and giving a boost to infrastructure. It is a much-appreciated effort, which will aid the state in its march towards progress