joehovel 06 May 2015

Land transfer in ap

I'm at a loss to understand conflicting advice received....

A rual local private but not-for-profit school (for the poor) here is financed entirely by foreign donations.

A Society was founded to manage the finances of the school. Because one has to prove the function of the society, some barren agricultural land to build the school on was purchased via an existing Social projects society, with an MOU to transfer the land once the school society achieved its tax status. Now the land is no longer agricultural and the advice is that it is now commercial. The transfer fee to the school society has been set at 23 lakh!!!!

None of the donors are willing to just hand that amount over to throw to the government for fun, of course.

Is there a 'class' or 'zoning' or 'category' of land which has a lower transfer duty? Is there something like 'land for social projects' or 'community services' or similar? I'm hoping the school grounds could be reclassified to allow this transfer to be affordable.

The other society has since gone in another direction and is no longer willing to assist - unless they get paid big fees..... extortion, really.... but that is another issue we want to stay out of.

Please consider and advise me so I can assist the school society to take the best path of action.

Regards,

Joe

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3 Replies

bsrao 07 May 2015

As both are non-profit societies, the land may be trabsferred by way of gift (donation) without any consideration from non-school society (donor) to school society (donee). You can reduce the charges but there is no complete exemption.

joehovel 07 May 2015

Thank you very much for the response.

The transfer is by way of donation in any case. But the charges were advised to be 23 lakh....

What should the charges be be in your view? What do they depend on? I was advised they were so high because it was 'commercial land' now, which it clearly is not.

Kind Regards,

Joe Hovel

bsrao 07 May 2015

Apply to the Government (cabinet has powers) to exempt stamp duty for the proposed donation (gift) if the school is reputed and has been serving needs of the poor. Meeting the CM would help.

If you want to dispute on the type of land, then you can file a writ in the High Court challenging the land classification (if you are sure).

Otherwise, there is no way one can avoid this payment of regn. charges.