It has been reliably learnt by MCHI-CREDAI that the government is proposing to hike the Annual Schedule of Rate or ASR for 2016. Considering its long term impact on the common citizen and the housing sector at large, it feels that the government needs to be sensitive towards and take cognisance of the sentiments of the common citizen at large.
Over the past three months, MCHI-CREDAI has been representing this issue at various levels in government, right from IGR, Revenue Minister to the Chief Minister. The government appears to be ignoring the strong market indicators and reasoning provided in these representations. Even the suggestions made by around 100 plus elected representatives seems to have been set aside. Serious doubts and questions have been raised on the very basis and methodology of fixing the ready reckoner rates.
The fundamentals of calculating ASR appear to be in complete contrast to the ground realities. In most of the cases they are artificial, especially in case of land, where not many land transactions have been reported within MMR that could become the basis for fixing the land ASR. This anomaly is only creating further room for speculation and parallel economy.
This proposed increase in ASR under the current market conditions is contrary to the policy of ‘Housing for all by 2022’ announced by the central government. The announcement of providing affordable housing to the masses shall be defeated, according to MCHI-CREDAI.
The ASR rates declared are used for the purpose of calculating property tax, stamp duty, premiums and other taxes, which in turn unnecessarily increase the burden of tax on the home buyers, manifold. MCHI-CREDAI shares that through reliable sources it is learnt that ASR linked government taxes have increased five-fold between 2008 and 2015.
It also happens that if the selling rates are lower than the market rates that difference is considered as deemed income under the income tax act and tax is collected both from the buyer and seller of the flats without any real income.
The ASR should be formulated with a vision to guide the minimum rates of property in any given area. This way, no individual or stakeholder is affected and made to unnecessarily pay higher stamp duty. The government does not in any way lose revenue because stamp duty is charged on the higher of the two rates, ASR or registered agreement values.
This request of MCHI-CREDAI has repeatedly been turned down by the IGR as is reflected in the ASR of 2015 and the previous years. By using average rate in a given area as ready reckoner rate, properties, which are otherwise of the affordable housing type and below such average, are forced to pay stamp duty at the higher average rate. Thus, average rate becomes the lowest rate in the given locality which is totally unreasonable with a direct impact on affordability.
Dharmesh Jain, President of MCHI-CREDAI, strongly feels that even today the government can take the decision to not to revise the ASR rates without any adverse impact on the government's revenue target of 2016.
Source: dnaindia.com
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