Editorial: Scrap Stamp Duty in India

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By Dr. Sanjay Chaturvedi, LLB, PhD.

World over, wherever GST is imposed, there is no Stamp Duty. This is nothing but double taxation. India has many states and UT and every state has its own stamp duty rate. Cost of acquisition must be rationalized. Mere registration charges of the documents should be taken and stamp duty must be scraped and repealed. When GST is already in place, the governments already take their share of the revenue. All five taxes like Sales Tax, VAT etc have already subsumes in the GST, why not stamp duty also merged with GST.

The Stamp Duty is a big percentage of the purchase price when the purchasers have already finding it difficult to cope up with even 15% margin money and take 85% as home loan.

The exchequers must think of double taxation on the same transaction with different name is a burden on the person who is taking home loan and paying the taxes through his nose. The relevance of the stamp duty is negligible when GST is already in place.  The National Housing Policy 1998 and 2005 had advocated the rationalization of Stamp Duty across the nation and one single percentage of ad volarum tax be introduced to rationalize transactions in the country. The federal system in our country have restrained rationalization of the Stamp Duty.

Although it is State’s prerogatives to impose Stamp Duty but it was  introduced in 1984 in Maharashtra and during that time in other part of the country. But in the era of GST, double taxation must be stopped immediately. Following is the table of Stamp Duty in different states in India.

Sl. No. State Rate of Stamp Duty
1. Andhra Pradesh 8%
2. Bihar 8%-urban & 6%-rural
3. Gujarat 4.9%
4. Haryana Urban: 8%-male & 6%- female;Rural: 6%-male &4%- female
5. Himachal Pradesh 5%
6. Karnataka 8.4%
7. Kerala 13.5 %- urban, 10% -rural
8. Madhya Pradesh 10%- male, 8 %- female, 9%- joint regis tration
9. Maharashtra 5%-male & 6%-frmale
10. Orissa 11%-urban & 8%-rural
11. Punjab Urban: 8%-male & 7%- female;Rural: 5%-male & 4% -female
12. Rajasthan 6.5%-male & 5%- female
13. Tamil Nadu 8%
14. Uttar Pradesh 10 %- Male, 8 %- female
15. Uttaranchal 10%-male, 8%- female
16. West Bengal 6% if value of property is <=25 lakh, 7% for properties valued > 25 lakh; duty is also lower by 1% for panchayat




Stamp Duty on Conveyance:

States Minimum Maximum
Andhra Pradesh 11.5 13.5
Gujarat 0.75 6
Kerala 12 15.5
Maharashtra 4 5
Karnataka 8 10
Punjab 0.5 9
Rajasthan 7 11
Tamil Nadu 6 8
Haryana 6

*As applicable on February 19, 2007.

Source: National Institute of Public Finance and Policy (2007), Primary survey Data on Stamp Duty, New Delhi.

About Dr. Sanjay Chaturvedi

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