Sri. S.M. Krishna, Chief Minister of Karnataka, who is also in charge offinance presented the budget proposals on 21'1 march 2003. Budget follows the usual trodden path, taxing what is left but in the central budget.
Middle class has to bear the burden with the imposition of APMC cess, and tax on power bills. Flat purchasers are worst hit.
Though reduction in stamp duty and registration charges are welcome, continuation of additional stamp duty on behalf of local bodies in the form of cess will continue to be a burden. The removal of slab system and introduction of uniform 8% of the stamp duty on purchase of flats is burden to middle class who purchase economy budget flats. The burden is more on small budget flats, which tapers at the higher end.
The following table shows the increase of the Flat First Registration:
|
Stamp duty and registration changes
|
|||
|
Value of flat
|
Present
|
Revised
|
Difference
|
|
(% in brackets)
|
|||
|
3,00.000
|
18,300
|
34,200
|
15,900
|
|
|
|
|
(86.88%)
|
|
5,00.000
|
32.600
|
57,000
|
24,400
|
|
|
|
|
(74.84%)
|
|
10,00.000
|
84,100
|
1,14,000
|
29,900
|
|
|
|
|
(35.55%)
|
|
18,00,000
|
1,83,300
|
2,05,200
|
21,900
|
|
|
|
|
(11.94%)
|
The middle classes, because of paucity of funds generally prefer low budget flats. Flats optimize the land use and provide safety and security. In a single stroke, the state government has negated the various tax sops, progressive measures of central government to make housing affordable.
In contrast the upper class, builders, promoters are rewarded by reducing the stamp duty on developmental agreements and general power of attorney for land development to Rs. 1000/- from the present 2% and 4% of market value. Taxing the end users will definitely effect the real estate sector adversely, particularly multiple housing projects, which are slowly gaining ground. Will the government think for a while?
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