Real estate in India is the most unorganised and graft-ridden sector. If regulated properly it can act as a major growth vehicle, can generate ample employment opportunities through 250-odd industries ancillary to the construction sector and thus can bring overall prosperity to the rural masses.Registration system needs most of the reforms to check evasion and in turn black money and inflation. State revenue authorities have a system of fixing minimum collector rates of property for the purpose of registration.



Though well aware, the authorities fix these rates well below the prevailing market prices. Undervalue sale deeds generate hoards of black money. These rates are targeted for certain quantum of stamp duty revenue with sustainable increase year after year even during recessionary conditions. Collector rates are increased with decline in stamp duty revenue due to comparatively less transactions in recessionary conditions. Why should there be a need for fixing minimum collector rates for registration purpose? Should there be a compromise on transparency to fetch more revenue? And that, too, at the cost of central exchequer. Why should a system not be devised to get the execution of sale deed on the prevailing market rates?

Even if the seller is ready to accept the full value by cheque, the purchaser dictates his term for registration at collector rates as he will have to cough up three to four times more stamp duty. And if even purchaser is ready to pay the full value by cheque, the seller sees the other way around to evade the capital gains tax. Black money, three to four times the cheque payment so generated, creates inflation and goes unaccounted evading direct taxes to the tune of 33 per cent.

Taxation structure should be rational enough to attract voluntary compliance.

More so it should be uniform all over the country. For instance stamp duty in Punjab was lowered from 12.5 per cent to six per cent during Beant Singh regime. The rate was enhanced to nine per cent indirectly by adding three per cent social security cess during Capt Amrinder Singh regime. In addition the purchaser also has to pay one per cent registration charges maximum of Rs 10,000. Whereas, in Chandigarh it is five per cent with Rs 1,000 maximum as the registration charges.