How You can Take Advantage of Stamp Duty Reduction in West Bengal

Homebuyers are having an extremely favourable opportunity to buy their dream homes for some time now. The home loan interest rate is now at a historic low. Although it is unlikely to go down further as the interest rate cycle may turn upwards from here in view of the elevated threat of inflation raising its ugly head. Besides, the PMAY CLSS benefits are also available and homebuyers are truly benefitting from the scheme. Moreover, the West Bengal government implemented a short-term policy of circle rates and stamp duty reduction which will provide immediate relief to homebuyers in the wake of Covid second wave.

What is the Policy?

The policy states that reduced stamp duty will be applicable on sale documents for properties in West Bengal. Furthermore, circle/IGR rates will also be reduced on all properties in West Bengal.

The quantum of stamp duty reduction is 2% while the circle/IGR rates are reduced by 10%.

The policy is effective till 30/09/2022.

There is a substantial benefit for the homebuyers and it is explained here. As there are substantial savings for the homebuyers, they should take advantage of this policy before it is expired.

How to Take Advantage of the Policy?

“Both reduced stamp-duty rate and reduced Circle Rate/IGR Rate will be applicable only to the documents which will be executed and registered during the period from 09/07/2021 to 31/03/2022 (both days inclusive). Neither reduced stamp-duty rate nor reduced Circle Rate/IGR Rate will be applicable to the documents which are executed within the above noted period but not presented for registration within the said rebate period or executed earlier but presented for registration within the said rebate period.”

It is important that the sale agreements are registered during this window of opportunity.

To avail the benefit of reduced stamp-duty rate or reduced Circle Rate/IGR Rate or both, the e-Assessment Query Slip pertaining to any document needs to be generated within the said rebate period i.e. from 09/07/2021 to 31/03/2022.

Agreement to Sale without Possession

Stamp duty @ 2% will be chargeable on the assessed market value arrived on the basis of reduced Circle rate/IGR rate. If the final sale deed connected to such agreement is executed and registered within the said rebate period, the benefits of reduced stamp duty will also be applicable at the time of registration of the final sale deed.

However, if the final sale deed connected to such agreement is executed and/or registered after the expiry of the said rebate period, stamp duty on such final sale deed will be chargeable at the rate prevailing at the time of registration of final sale deed less the stamp duty paid at the time of registration of the agreement, but on market value assessed on the basis of reduced Circle Rate/IGR Rate at the time of registration of the agreement.

In the case of booking a property, an agreement is registered where the above condition is applicable.

For deeds in which full stamp duty will be paid, the benefits of both reduced stamp duty rate and reduced Circle Rate/IGR Rate will be applicable for the determination of chargeability of stamp duty. At the time of registration of final sale deed connected to such agreement Rs.10/- only will be charged as stamp duty and registration fees will be charged on market value assessed on the basis of reduced Circle Rate/IGR Rate at the time of registration of the agreement.

Final Sale Deeds Connected to any Earlier Registered Agreement without Possession

For deed in which 2% stamp duty was paid at the time of registration of agreements and final sale deed is registered within a maximum of four years from the date of the agreement, stamp duty on such final sale deed will be chargeable at a reduced stamp-duty rate less the stamp duty paid at the time of registration of the agreement, but on the basis of the market value assessed at the time of registration of the agreement. The reduced Circle Rate/IGR Rate will also not be taken into consideration for the determination of the amount of registration fee payable at the time of registration of such final sale deed.

For deed in which 2% stamp duty was paid at the time of registration of agreements and final sale deed is registered after the expiry of four years from the date of the agreement, stamp duty on such final sale deed will be chargeable at a reduced stamp-duty rate less the stamp duty paid at the time of registration of the agreement, but on market value assessed on the basis of reduced Circle Rate/IGR Rate.

For deed in which full stamp duty was paid at the time of registration of agreements, stamp duty on such final sale deed will be Rs.10/- only, and registration fees will be payable on market value assessed at the time of registration of the agreement.

The Benefit is Substantial and the Window of Opportunity is Short

Homebuyers who have been waiting to buy their chosen homes for even more opportune times must stop waiting any further. The interest rate is unlikely to go down any further. And home prices are likely to rise now because of a widespread increase in raw material prices such as steel and cement.

The government is also likely to withdraw some of the financial benefits earlier announced because it needs to shore up its finances.

Therefore, homebuyers must act now before the window of opportunity is closed.