High Valued Properties are Avoiding Stamp Duty
Many high valued properties in India are avoiding the payment of stamp duty as the buyers are acquiring the shares of the construction company, which owns the property.
In the process the buyers are not transferring the ownership of the property in their name by paying stamp duty. Thus the seller avoids the payment of capital gains tax, and the buyers pays only 0.25% taxes on the share transfer instead of the 6-8% stamp duty.
The same procedure is followed by many high value property transactions in Lutyens’ Delhi, Golf Links , Shantiniketan, and many sea-facing apartments in south Mumbai.
Government of Mumbai has suffered the loss of Rs 10 crore because of the transaction of Rs 100 crore property using the transfer of shares. While at least half a dozen big bungalow deals happened last year in the Lutyens’ Bungalow Zone and Golf Links areas in Delhi, the registrar’s office in Delhi has no record of any property transaction in LBZ in the past two years.
Government is now planning to scrutinize and monitor all such deals happening in Delhi and Mumbai.
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Source: Economic Times
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