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Not just the land but also Real Estate in big cities. A lot of Real Estate deals happened with significant cash percentage so that people could cheat with Stam
by sbmthakur 7y ago
Not just the land but also Real Estate in big cities.
A lot of Real Estate deals happened with significant cash percentage so that people could cheat with Stamp duty and Registration. At the same time, this also inflated the prices , thereby making them unaffordable to a large section of society.
- kylehotchkiss 7y agoAmerican (who spends lots of time in India) here: what is stamp duty and registration? I see a lot of stamp paper and still don't really understand what it is
- selimthegrim 7y agoPakistani-American here - land transfers in subcontinent are carried out by first going to the local patwari (clerk) in charge of land revenue records. Stamp duty and and registration is charged after that on declared transfer price of the property, so cash portion is under the table and not subject to it https://joshandmakinternational.com/legal-procedure-pertaining-to-selling-property-in-pakistan-excluding-federal-territory/ https://joshandmakinternational.com/legal-procedure-pertaini... Source: family selling a house in Karachi
- rohan_shah 7y agoSo black money is equally prevalent in Pakistan also? Another sign of our strong bond, connection and brotherhood! xD
- yogesch 7y agoNot Paki, but aware of their situation. It is not "equally" prevalent. It is at least an order of magnitude worse. Almost everything in Pak is about an order of magnitude worse than in India. Almost everything, except civic violence - that's about 2-3 orders of magnitude worse. The establishment has traditionally had other priorities. The current PM is trying to fix some things but faces tremendous pushback.
- selimthegrim 7y agoAs a note, that site is out of date for Punjab, in 2017 they combined a lot of taxes under stamp duty (not relevant to me obviously)
- rohan_shah 7y agoWhen you buy a property, you have to register the property (on your name) with the local government body (generally the Municipal Corporation). The fee paid here is calculated as a percentage of the price paid for the land/property. So everyone buys (on paper) at exactly the ready reckoner rates (the minimum prices) and then pay the minimum taxes (or registration fees). While in reality the prices are way higher than the ready reckoner prices (generally 5 to 10 times) and so the rest of the price is paid in cash (unaccounted black money). If I may ask: Where in India so you like to spend your time in terms of urban/rural India? Have you found any life-threats just because you're a foreigner?
- kranner 7y ago> While in reality the prices are way higher than the ready reckoner prices (generally 5 to 10 times) Sub-registrars often refuse to value the property at the ready reckoner price. I've seen transactions where the registered value was more than 60% of the actual value, though this is in an urban area.
- sifar 7y agoBasically when you buy any property in India, you have to get your name as the owner in the historical record of the owners with the Land Registrar. This is the registration which is around 3-4% of the property value. The respective states also charge 2-3% for the sale.
- yogesch 7y agohttps://gharpedia.com/stamp-paper-judicial-non-judicial-stamp-paper/ https://gharpedia.com/stamp-paper-judicial-non-judicial-stam... https://en.wikipedia.org/wiki/Stamped_paper https://en.wikipedia.org/wiki/Stamped_paper Quote from wiki - "The use of stamped paper in the American colonies was so unpopular that it has been credited with sowing the seeds of the American Revolution"
- ssivark 7y agoSuppose you wish to register ownership of a house/car/etc. The government might want to collect taxes at that point. Instead of asking that you remit money with the specific agency, you are asked to buy "govt authorized stamps" (from a central agency) worth the same amount and affix it to the registration documents as proof of payment.
- csomar 7y agoThink about it as the weak government trick to collect taxes. Government is weak and can't enforce tax collection: i.e 99% of citizens will still not comply even if you are aggressive in auditing. So instead, they collect taxes where you can't escape them. Since you need to register land/house at the national registry (or similar), they require that you pay a tax before you can execute such a registration. Obviously, you can lie here but at least they are getting something out of it. Other tricks are taxes when you are leaving the country (buy a stamp so that you can board a plane), arbitrarily giving tickets on highways, super high taxes on telecommunication, cars and other stuff where you need to go through government, taxes collected by municipality go to the government instead, etc... It'd be interesting to study all countries and deduce that if a government is using these measures then it is a failed government.
- aviraldg 7y ago> Other tricks are taxes when you are leaving the country (buy a stamp so that you can board a plane) What is this about? Genuinely curious. (Indian, and I haven't heard of this before.)