Centre proposes stamp duty cuts on real estate

NEW DELHI: The Centre on Thursday proposed reduction in stamp duty on real estate deals to less than five per cent in order to prevent tax evasions.

Union urban development minister S Jaipal Reddy, who spoke about Centre's initiatives aimed at city reforms, said states should adopt the proposal gradually.

"Stamp duties must be reduced. Huge stamp duty often leads to evasion of taxes, so this must be reduced to less than five per cent in due course," he said.

The minister also underlined the importance of catering to the housing requirements of the urban poor, saying slum-dwellers make up a large population of cities across the country.

He cited the central plans to build 100,000 multi-storeyed houses for Delhi's slum-dwellers.

"We've decided to provide one lakh houses through multi-story buildings in Delhi. Since there is greater volatility in the land market in urban areas than in Sensex we've decided these apartments can be developed by private builders but through a transparent auctioning process."

Reddy spoke about $22-billion plans as part of urban reforms in the country over the next six years.

"In the next six years we are looking forward to releasing $11 billion with a view to motivate the state governments to raise a matching amount so that we can spend $22 billion (on urban development). Also, the money that the government of India is willing to spare will be linked to reforms being carried out by the state government," he said.