Blow to flat buyer, pay boost to babu - Stamp duty up on homes above Rs 25 lakh
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- Published 16.03.07
Calcutta, March 16: Flats and houses valued above Rs 25 lakh will attract higher stamp duty but state government employees stand to reap gains from the Bengal budget unveiled today.
The budget kept in mind the industrialisation campaign of the government by allowing tax cuts on any commodity that is used as an industrial input.
But for houses and flats whose market value exceeds Rs 25 lakh, the stamp duty — the fee the buyer pays the government for transferring property — will go up to 7 per cent.
The new rate is expected to cover most flats coming up within city limits, where property prices are high. The additional burden on a buyer is expected to range from Rs 25,000 to Rs 3 lakh.
The value-linked stamp duty hike came as a surprise as the government was expected to bring down the rate to a uniform 5 per cent, which is mandatory to access central funds for urban development. But officials said the state has time till 2012 to meet the duty deadline. The stamp duty for rural areas now is 5 per cent and for urban areas 6 per cent.
Dasgupta tried to justify the hike — a fresh damper at a time home loan rates are going up — by saying “common people” would be spared.
“Common people won’t be affected by the additional duty. It is aimed at high-end users,” Dasgupta said after presenting the budget in the middle of a bandh and an Opposition boycott over the Nandigram police firing.
The duty hike is expected to yield Rs 20 crore in extra revenue, helping Dasgupta limit the deficit at Rs 3 crore. Additional levies in the budget are expected to fetch the government Rs 150 crore, of which Rs 50 crore will come from value-added tax (VAT) on tobacco, Rs 30 crore from country liquor and Rs 50 crore from penalties to be collected from overloaded trucks.
Playing Santa to government employees, Dasgupta announced that the dearness allowance up to 50 per cent of basic pay would be merged with the basic pay. For pensioners, dearness relief up to 50 per cent of basic pension would be merged with basic pension.
The payout didn’t end there. A fresh instalment of dearness allowance for government employees will be released with effect from April 1. Pensioners will get similar relief.
Tobacco and tobacco products, so far under sales tax, will face VAT at the rate of 12.5 per cent. Bidis are exempt. However, the levy can’t come into effect immediately since Lok Sabha Speaker Somnath Chatterjee has referred the Taxation Laws (Amendment) Bill, 2007, to a parliamentary standing panel.
The budget turbo-charges the auto industry by reducing taxes on spares from 12.5 to 4 per cent.
Dasgupta says the cut will help small traders and businessmen, but the benefits could also flow to the ancillary units expected to come up near the Tatas’ car plant in Singur.
Lower taxes should make plastic mats, plywood, spare parts of electric fans and air-conditioners cheaper. Lanterns, kerosene lamps and embroidery should cost less, too, after the tax exemption granted today.
Despite the government insisting that agriculture prospects are shrinking, Dasgupta has projected over 3 lakh new jobs in the sector.
The dole for workers of factories and tea gardens that have been lying closed for more than a year has been raised from Rs 500 to Rs 750 a month per head. The minister has proposed a Rs 100-crore fund for self-help groups and self-employment programmes. State transport corporations will buy 800 new buses.