The Hindu 13.10.2010
Delhi circle rates to double
Special Correspondent
| Official notification expected by this month-end |
For the first time they are being increased
It is much lower than the rates in Noida, Gurgaon
NEW DELHI: The Delhi Cabinet on Tuesday decided to increase the circle rates -- minimum rates for valuation of land and immovable properties -- by 100 per cent. Ironically, while this may seem too high, it is claimed to be much lower than the rate that had been proposed by the Revenue Department as also the prevailing rates in neighbouring Noida and Gurgaon.
The new rates would come into effect after the notification that is expected by this month-end and would provide a new benchmark for charging stamp duty on the instruments.
The circle rates were first introduced in the Capital in July 2007 and were notified under the provisions of the Delhi Stamp (Prevention of Undervaluation of Instruments) Rules, 2007.
This is the first time they have been increased. However, while even higher rates had been proposed initially, the Delhi Cabinet has decided to settle for a hike of 100 per cent.
Chief Minister Sheila Dikshit, who chaired the Cabinet meeting, said the rates have been increased to reduce circulation of black money in property transactions in Delhi.
“The revision in circle rates will help in curbing the prevailing undervaluation of properties,'' she said.
Though Delhi has also decided to rationalise the rates on the premise that the prevailing rates in the neighbouring township of Noida in Uttar Pradesh and Gurgaon in Haryana are now much higher with the respective State governments hiking them regularly, the decision has brought little cheer to the tax payers.
“The circle rates that have been approved continue to be much less than the prevailing market rates. Moreover, while the Revenue Department had proposed much higher rates to reduce the play of black money in the property market and this proposal had also found favour in a Cabinet meeting on June 14, the new rates that have been announced are diluted. This would only help those with black money and reduce the prospective revenue of the Delhi Government,'' said an official.
Prior to the Cabinet's latest decision, the circle rates based on the Municipal Corporation of Delhi's categorisation for the residential Property Tax were Rs.43,000 per square metre for Category-A, Rs.34,100 for Category-B, Rs.27,300 for Category-C, Rs.21,800 for Category-D, Rs.18,400 for Category-E, Rs.16,100 for Category-F, Rs.13,700 for Category-G and Rs.6,900 for Category H colonies.
The new rates would now go up by Rs.6,900 per sq.m. to Rs.43,000 per sq.m. but this would still be much lower than the hike of Rs.9,000 to Rs.125,000 per sq.m. initially proposed.
“People desirous of buying property in Delhi by taking bank loans would suffer due to this. On the other hand those with black money would be able to register properties by paying lower circle rates,'' said a property dealer.
For the Delhi Government, the new rates would mean a substantial loss in revenue from what could have been earned through the original proposal.
“The expected revenue from property registrations for the year was around Rs.1,500 crore and out of this Rs.800 crore has already been earned. The implementation of the proposed rates would have resulted in additional revenue of over Rs.500 crore.''
