Bhubaneswar: Odisha Legislative Assembly has passed the Indian Stamp (Odisha Amendment) Bill, 2021here on 8 September.
The amendment of the Indian Stamp Act, 1899 in its application to the State of Odisha passed by the Odisha Legislative Assembly is a milestone which will create an environment conducive for Real Estate growth, which will not only have a salutary impact on the economy, but will also contribute immensely in creation of Affordable Housing Stock for all categories of people.
Representations were received from various stake holders to reduce the stamp duty on Agreement to Sell and Power of Attorney which adversely affects the growth of transaction of immovable properties in Odisha.
When high stamp duty is prevalent, there is a tendency to evade the registration of such documents. In last seven years only 0.02% of Sale Agreement documents with possession of property and 0.14% of Power of Attorney with possession of property have been registered in the state of Odisha
Bishnupada Sethi, Principal Secretary Revenue & Disaster Management, activated the process of amendment looking at the people’s demand and now it has been approved by State Legislature, sources said.
As per the amended provisions, in Agreement to Sell / Development Agreement / Construction Agreement involving delivery of possession and Power of Attorney authorizing the person other than family members to sell immovable property, stamp duty @2% will be leviable. When Development Agreement and Power of Attorney are executed between the same parties involving the same property, and 2% stamp duty is paid on Development Agreement, then only a nominal amount of Rs.1,000 stamp duty will be paid on Power of Attorney.
Due to such adjustment of stamp duty, the cost of the real estate projects in Odisha can be brought down and can become more affordable for the intending purchasers, resulting in increase in economic activity and a substantial benefit for the general public at large. The growth of the real estate sector shall usher in growth of the economy in terms of growth of construction industry, growth in employment generation and increased sale of apartments/ buildings resulting in more revenue for state by way of growth in collection of direct taxes such GST, stamp duty, registration fees, etc.
When Power of attorney is given to family members such as father, mother, wife, husband, son, daughter, brother and sister to sell or transfer immovable property, stamp duty of Rs. 1000 is paid. Through the present amendment, five more relations such as daughter-in-law, grandson, granddaughter, grandfather and grandmother are added within the scope of family members for execution of power of attorney for sale of any immovable property within the state.
For certified copy of the previously registered document, stamp duty enhanced from Rs. 10 to Rs. 100 to augment the revenue for the state.
This long-awaited piece of legislation, passed today by the Odisha Legislative Assembly will result in positive cascading growth of economy and consequential substantial increase of revenue for the state and overall welfare of the citizens.
As per extant provisions of Indian Stamp Act, an Agreement to Sell involving delivery of possession of any immovable property or a Power of Attorney, authorizing the person other than family members, to sell such immovable property, are deemed as conveyance in the state of Odisha and accordingly, the stamp duty @5% on such instrument is being collected on the basis of the market value of the property which is the subject matter of such instrument.
A real estate promoter/developer requires two types of documents executed between the developer and the land owner, viz. a Power of Attorney giving absolute power to the developer to sell the property to the public after the development/ construction of any structural complex and Development/ Construction Agreement with the land owner with possession of property for necessary development of land/ to construct any residential/commercial complex over the land. The stamp duty on such documents is charged at par with sale deed i.e. 5%. Such increased financial burden is ultimately passed to the public thereby increasing the cost of the developed land and buildings.
Minister Revenue & Disaster Management Sudam Marndi piloted the Amendment Proposal, which received Green Signal of State Assembly.