Maharashtra Government Adjusts Stamp Duty Rates to Generate Rs 2000 Crore Amid Financial Strain

Mumbai, 2nd October 2024: The financially challenged Mahayuti government, grappling with increasing loans and budgetary commitments to populist initiatives like Ladki Bahin and Ladka Bhau, has opted to adjust stamp duty rates. This change is expected to generate an additional ₹2,000 crore in revenue. The revised stamp duty structure will range from a nominal fee of ₹100—previously applicable for document registration—to an undisclosed amount based on the value of work contracts, mergers, amalgamations, and restructuring.

A decision made by the state cabinet on Monday stated that the ₹100 minimum registration fee will no longer apply. For instance, tenements built under the Slum Rehabilitation Authority (SRA) scheme, which previously incurred a ₹100 stamp duty, will now be subject to a fee of ₹500.

Sources indicate that the ₹100 and ₹200 stamp duties, which applied to 12 different document types, will now be increased to a maximum of ₹500. Additionally, the stamp duty on a company’s articles of association will rise from 0.2% to 0.3%, applicable for amounts up to ₹1 crore, increased from the previous cap of ₹50 lakh. Similarly, awards related to mergers, amalgamations, restructuring, and division will now be charged according to the market value of the company’s fixed and movable assets, rather than a flat ₹500.

The stamp duty for work contracts valued up to ₹10 lakh, which was previously set at ₹500 plus 0.1% on the excess amount, will now have a new structure. The updated rate will be ₹500 for contracts up to ₹5 lakh, with 0.3% applied to any amount exceeding that threshold.

The revenue department, which proposed these revisions, claims that the changes will promote simplicity, and uniformity, and improve the business environment. Implementing these alterations will require amendments to the Maharashtra Stamp Duty Act of 1958.

For the current fiscal year, the stamp duty registration division has a target of approximately ₹60,000 crore. Last year, the department raised over ₹50,000 crore for the state treasury, underscoring the significance of stamp duty as a key revenue source for the government.