A committee appointed by the state government for giving a fillip to real estate has recommended reduction in stamp duty as well as premiums paid by builders to the BMC for extra FSI.
The sub-committee for real estate was headed by HDFC chairman Deepak Parekh. However, Parekh refused to comment on the matter.
A senior officer of the housing department said, “The committee has told us to reduce stamp duty and also cut rates of the premiums the builders pay to the BMC. Over the last few years, the premium rates emerged as a big source of income for the BMC. The builders get various concessions in lieu of enhanced premiums. This has increased the cost of construction of new buildings as well as the redevelopment projects.”
The housing department officer said that a call on the reduction in stamp duty and ready reckoner rates will be taken by the revenue department while the urban department will decide on the premium for FSI. Another senior bureaucrat said that three or four models of packages have been formulated. The cabinet sub-committee will take a call, and later the final decision will be taken by the state cabinet.
Builder Niranjan Hiranandani, national president of National Real Estate Development Council, said, “If we want to follow Deepak Parekh Committee’s recommendations, we have to reduce ready reckoner rates, else buyers and sellers will face trouble from the income tax department.”
Hiranandani had earlier told that flat prices cannot be reduced because under Section 43 CA of Income Tax Act, there is a penalty of 30 per cent each levied on the buyer and the developer if they sell flats 10 per cent less than the prevalent ready reckoner rate.
Builder Sandeep Runwal said, “Cut in stamp duty alone won’t help. They have to give a waiver in stamp duty for one year.”
Developers move online petition
Desperate for some incentives from the government to reignite demand cycle in the sector, developer associations from the Mumbai Metropolitan Region on Tuesday came together to form MMR Action Committee, and submitted a copy of their online petition on change.org to former Chief Minister and Leader of Opposition Devendra Fadnavis.
Fadnavis assured them that he will once again take up their “logical, genuine, and reasonable” demands for one-time restructuring of all loans with the Union Finance Minister Nirmala Sitharaman. The petition has been signed by 35,000 developers.
