Affordable homes are expected to get exemption from stamp duty which is around 4% to 8% of the value of the transaction.
The ministry for Urban development and housing has already sent a letter to the state government in regards with the same, as confirms M Venkaiah Naidu, the Urban development and housing Minister.
Adding to this, he also said that following the goods and services tax (GST), the central government will make sure that no net tax escalation takes place in the housing sector, especially the budget housing sector and that making GST applicable on the real estate sector also will be beneficial for the industry.
Affordable housing has also been exempted from paying the service tax which is around 5.35% of the selling price of the property. According to him, his ministry has taken up the issue of exemption under GST with the finance ministry. He has also suggested the ministry to fix the rate of tax for the realty sector at a revenue neutral one, and not a very high one.
But the stamp duty is not included in the GST as the states did not stick to the decision of inclusion of stamp duty under GST.
About Stamp Duty-
A stamp duty is a kind of tax, which is paid on property transactions. It comes under section 3 of the Indian Stamp Act, 1899. Usually, it is paid by the buyer but in case of exchange of properties, both the parties involved in the transaction have to pay in equal amounts. Stamp duty is a legally paid tax and therefore can act as an evidence for any transaction involving purchase or sale of any property. Since it is the responsibility of the state government, the rates of stamp duty might be different in every state.