The Uttar Pradesh Cabinet is considering a proposal to do away with the 1% stamp duty levied on conversion of agricultural land for residential, commercial and industrial use. If accepted, the move would come as a major relief for those planning to invest in rural parts of India’s most populous state.
According to media reports, the UP revenue department has sent a proposal to the state Cabinet in this regard as the state tries to compete with its peers to improve its Ease of doing Business ratings.
So far, investors must pay 1% of the land value for land use conversion of agricultural land in UP.
For the uninitiated, the government levies a tax when a property changes hands, from the seller to the buyer. This tax is known as stamp duty. Stamp duty is levied by states and, therefore, rates vary from state to state. The levy is so named because the stamp mark on the documents is the testimony that the paper has assumed approval of the authorities and now bears a legal validity.