In a significant move aimed at easing the financial burden of intra-family property transfers, the Uttar Pradesh government has dramatically expanded concessions on stamp duty for gift deeds. The state cabinet, led by Chief Minister Yogi Adityanath, approved the proposal on Monday, extending a major financial benefit previously reserved for agricultural and residential properties to commercial and industrial assets as well.
What the New Stamp Duty Rules Entail
The core of the decision is a substantial reduction in the stamp duty payable when immovable property is gifted among family members. Previously, gifting commercial properties attracted a stamp duty of 7% in urban areas and 5% in rural zones. Under the revised provision, irrespective of the property's location in a city or village, the stamp duty on such family gift deeds will now be capped at a flat rate of Rs 5,000.
This change aligns the treatment of commercial and industrial properties with the benefit granted to agricultural and residential ones through a notification issued on August 3, 2023. Stamp and Registration Minister Ravindra Jaiswal highlighted that before initial reforms in 2022, family gift deeds were charged stamp duty at the full circle rate, making transfers costly.
Streamlining Legal Transfers Within Families
The government's objective is to make the process of transferring property within a family more affordable, transparent, and legally straightforward. An official stated that the move is expected to reduce legal complexities and financial hurdles associated with partitioning or gifting assets to relatives.
For smooth implementation, the Cabinet also approved further clarifications on the definition of "family members" and other provisions mentioned in the earlier 2023 notification. The revised rules come into force immediately from the date of their publication in the official gazette.
It is important to note that under the Registration Act, 1908, gift deeds for immovable property require compulsory registration. The concessional stamp duty is applied at the time of this registration process.
Cabinet Also Nods to Semiconductor Policy Incentives
In the same meeting, the UP Cabinet took another major step towards boosting high-tech investment in the state. It approved a proposal under the Semiconductor Policy, 2024 to attract large-scale investments and generate substantial employment.
Finance Minister Suresh Khanna noted the rapid expansion of semiconductor manufacturing in nations like the US, Japan, Taiwan, and across Europe. To compete, Uttar Pradesh will offer a package of special incentives on a case-to-case basis for investments of Rs 3,000 crore or more.
The incentives for eligible semiconductor units include:
- Interest subsidy on loans.
- Reimbursement of employee costs.
- Exemption from net State GST (SGST) for a period of 10 years.
- 100% EPF reimbursement for employees domiciled in UP (up to Rs 2,000 per month).
- Concessions on water charges.
- Electricity tariff relief of Rs 2 per unit for 10 years.
This dual focus on simplifying domestic property norms and attracting futuristic industries underscores the state government's broader strategy to improve the ease of living for families while aggressively pursuing economic growth and job creation.
