Implications of Ready Reckoner - A monster !!

Many a levies in the State of Maharashtra are based on the rates set out in the Ready Reckoner. Before commenting on the rates determined in Ready Reckoner, let us see its coverage:

(i)  Ready Reckoner commenced with the payment of stamp duty and registration fee on transfer of any immovable property by any means. The stamp duty and registration fee is calculated at a percentage of the total value of the property, less permissible deductions. The total value of the property is reckoned by its built up area multiplied by the Ready Reckoner rate for each zone or area in the Mumbai city and around State of Maharashtra.

(ii) Gradually, the Ready Reckoner has been considered as the barometer for other levies also:

(a) for charging capital gains tax u/s.50C, 56 and income from other sources u/s.43CA of the Income Tax Act, 1961;

(b) for purposes of value added tax and service tax;

(c) for levy of property tax by Municipal Corporations on capital value system since 01.04.2010;

(d) for premium of TDR, Fungible FSI, deficiency in open space, staircase and lift and all other premiums and penalties relating to building proposals.  

Thus, as on date Ready Reckoner has become a Holy Bible for tax levies within the State of Maharashtra. Why not? It is a gold mine for revenue collection burdening the citizen with irrational and illogical levies, increased every year arbitrarily.  

Whether Ready Reckoner is factually a Holy Bible?

A holy testament is followed provided the same does not hurt and is religiously sacred and adoptable. The arbitrary levy of rates in the Ready Reckoner and increased every year on an average at 10% per annum without the realistic diagnosis of the prevailing market conditions, cannot be considered as a testament, as it leaves much to be desired of the State Government.

The Government should lead by example. On the one hand, the object is to regulate the rates and prices in the realty sector to make the housing realistic and affordable. On the other hand, the Government betrays the object with impunity and enhances the rates in the Ready Reckoner every year without any rationality and realistic basis.

Promises made are never honoured but as a pleasing devise are postponed. The glaring instances are:

(i) while the Real Estate (Regulation & Development) Act, 2016 which came into force on 26.03.2016 and the Rules which came into force on 01.05.2017 has made it mandatory for the builders to sell the flats on carpet area, the levy of stamp duty still continues to be on the built-up area;

(ii) the proposal of absolutely exempting the small flats upto 250 sq.ft. and extending concessional stamp duty rates for flats upto 450 sq.ft. continues to be postponed.

Is this Government leading by example? Any extent of revenue collection is less for the Government.

Can such a Ready Reckoner be adopted universally in the State for all the levies as enumerated above? Yes, it can be to fill the coffers of the State Government, as it is perpetually in financial constraints. With the advent of GST, citizen in the State of Maharashtra would receive no respite as the levies based on Ready Reckoner would continue to hurt one and all. Are we not being surrounded by levies and levies only? Tolerant that we are, the State takes undue advantage in saturating us with a levy every day whether it is on petrol or diesel or on any essential needed for day to day existence.

When will State Government shed the clock of extortionist levy and provide reliefs much needed by common man to live and survive with dignity? When will State Government realise that only an honest State Government would attract more tax payers? When will State Government stop taking shelter under financial constraints which is unending?

Heavy levies fund monuments and statues but are not for providing electricity, water and atleast two meals a day, leave aside other essentialities for most of the villages surrounding urban living even after 70 years of independence. When will we be free from bondage of heavy levies? If not, atleast ensure life with dignity.

It is high time that we get relieved of this monster before it devours us or else prevail upon the enactors of Ready Reckoner to take a realistic view and rationalise the Ready Reckoner to make it acceptable and also make the State Government live up to its promises made every year before the issue of new Ready Reckoner, or atleast State should use the funds for essentialities first to ensure that the poor and needy live with dignity.

 

Published in Property Law
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