In a significant move aimed at providing financial relief and simplifying legal processes, the Uttar Pradesh government has expanded a key concession on stamp duty for property transfers within families. The state cabinet, in a meeting held on Tuesday, approved the extension of a concessional stamp duty cap to include commercial and industrial properties gifted among family members.
What the New Cabinet Decision Means
The latest decision builds upon a previous notification issued on August 3, 2023. At that time, the Yogi Adityanath-led government had introduced a major reform for agricultural and residential properties. It stipulated that when such properties were gifted to family members via a gift deed, the stamp duty would be charged at a concessional rate with a maximum cap of Rs 5,000. Previously, such transactions attracted stamp duty equivalent to the full circle rate of the property, which often ran into lakhs of rupees.
Stamp and Registration Minister Ravindra Jaiswal explained the context. Prior to these changes, the provisions of the Indian Stamp Act, 1899, and the Registration Act, 1908, governed gift deeds in UP. These laws typically mandated that gifting immovable property required stamp duty based on the property's market value, similar to a sale deed (conveyance deed), and compulsory registration.
Breaking Down the Financial Relief
The extension of the Rs 5,000 cap to commercial and industrial holdings is a major boon for business families and entrepreneurs. Earlier, stamp duty on commercial properties was levied at 7% in urban areas and 5% in rural areas of the state, calculated on the circle rate or transaction value, whichever was higher. This could amount to a substantial sum for high-value commercial assets.
The cabinet also approved further clarifications in the definition of 'family members' and other provisions mentioned in the August 2023 notification. This step is designed to eliminate ambiguity and ensure the concession is applied smoothly and consistently across the state.
Impact and Additional Decisions
Minister Jaiswal stated that this progressive step is expected to make intra-family property transfers more affordable, transparent, and legally streamlined. It reduces the financial burden on families looking to pass on business assets or industrial units to the next generation without the hefty tax implications of a sale.
The revised provisions will come into force from the date of their publication in the official gazette. In other decisions related to the Stamp Department, the cabinet approved:
- The free transfer of 920 square meters of land from the tehsil premises at village Basahia for constructing a new sub-registrar office building in Kushinagar.
- The allotment of 638 square meters of land from the old tehsil premises at Mauja Jhansi Khas for the construction of a sub-registrar office and a record room.
This series of decisions underscores the state government's focus on easing regulatory processes for citizens while also improving administrative infrastructure for better service delivery.
