On Tuesday, the state assembly amended the Municipal Corporation Act to allow this.
The legislation stated that to ensure the corporation or agency that has undertaken the notified Vital Important Urban Infrastructure Project has sufficient funds at its disposal “it is considered expedient to levy a surcharge by way of the stamp duty leviable on the instruments of sale, gift and usufructuary mortgage respectively of immovable property within BMC.”
The state government will pay the corporation or agency which has undertaken the notified project a grant-in-aid approximately equal to the amount realised on account of the surcharge levied. The money will be used for infra projects.
Mumbai Metropolitan Region Development Authority (MMRDA) had demanded to the state government to provide more funds by levying surcharge on stamp duty or increasing the premium on FSI for generating funds to infra projects. Earlier, the MMRDA used to sell lands and then generate money. Now, the land bank has dried and they are looking for more sources to generate money.
With the amendment, the stamp duty will rise from 6 per cent from the current 5 per cent on sale, gift and usufructuary mortgage respectively. Usufractuary mortgage is a special type of mortgage where the mortgagor hands over possession to the mortgagee till the repayment is done.
The one per cent surcharge was already charged in the jurisdiction of other urban local bodies after the Local Body Tax was abolished in 2015. Only Mumbai alone was not taxed. Across the state 21.49 lakh documents were registered last year in the state and the revenue earned was Rs 26,500 crore.
In Mumbai, approximately two lakh documents are registered annually and last year the revenue earned was Rs 10,500 crore.
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