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Maharashtra Govt Plans 10% Hike In Ready Reckoner Rates To Bridge Revenue Gap

It anticipates collecting INR 55,000 crore in stamp duty this year, but it also aims to raise an additional INR 15,000 crore through higher RR rates.

Maharashtra Govt Plans 10% Hike In Ready Reckoner Rates To Bridge Revenue Gap
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The cash-strapped Mahayuti government is expected to raise ready reckoner (RR) tariffs in the state by about 10% because raising revenue is one of its main priorities. It anticipates collecting INR 55,000 crore in stamp duty this year, but it also aims to raise an additional INR 15,000 crore through higher RR rates. However, because property would become more expensive, the move may have a negative effect on the real estate industry.

After being questioned about potential ways to boost state revenue, the revenue department -- which handles stamp duty and registration -- proposed the hike in its most recent proposal to the finance department. After sales tax and GST, stamp duty and registration are the third-largest revenue producers.

A tax department official said that RR rates are generally changed every year and come into effect from April 1. For a number of reasons, including the two elections held last year, the state government has not changed the tariffs in three years. The government is in desperate need of money after the burden of popular programs like Ladki Bahin, thus the raise is long overdue.

The officer claims that a number of factors influence the hike's amount. In addition to annual registrations, changes and the development of infrastructure in various areas are also taken into consideration. Villages are the unit in rural regions, whilst smaller units are found in urban areas. In urban areas such as Mumbai, a single suburb may include several units. The municipal planning department has gathered all of this data, and the proposal will be completed in February, he stated.

Since RR rates have been the same for the past three years, the gap between them and the real sale price has grown, said an urban development department officer. Properties cannot be registered at RR rates lower than those set by the government.

With the boost, the government anticipates a massive increase in revenue collection. Another officer from the department  stated that the real estate market experienced tremendous growth following the COVID-19 slump, so revenue has surpassed the target we set for the last three years. RR rates might generate at least INR 15,000 crore if they are raised starting on April 1. Indeed, the increase in stamp duty may cause a temporary lag in property registration, but this will subside within a few months.

The RR rate hike will cause flat prices to skyrocket and an accumulation of unsold apartments. One of the biggest employers and contributors to the GDP is the lodging business. To boost its revenue, the government should stop corruption rather than raise RR rates.

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