In a significant move aimed at easing the financial burden on families, the Uttar Pradesh state cabinet has approved a major concession on stamp duty for transferring commercial and industrial properties among relatives. The decision, taken on Tuesday, caps the stamp duty for such intra-family gift deeds at a flat rate of just Rs 5,000.
Major Expansion of a Popular Concession
This decision marks a crucial expansion of a relief measure first introduced in August 2023. Initially, the concessional stamp duty cap of Rs 5,000 was applicable only to agricultural land and residential properties. The cabinet has now broadened the scope of this benefit to include commercial and industrial real estate, offering substantial savings to business families and entrepreneurs.
Explaining the context, Stamp and Registration Minister Ravindra Jaiswal stated that under the traditional system governed by the Indian Stamp Act, 1899, gift deeds for immovable property attracted stamp duty calculated on the full market value of the asset, similar to a regular sale deed. Registration of such transfers under the Registration Act, 1908 remains mandatory.
From Full Circle Rate to a Fixed Cap
Minister Jaiswal provided a timeline of the reform. "Before 2022, gift deeds among family members were charged stamp duty equivalent to the full circle rate of the property," he said. The first breakthrough came with a notification issued on August 3, 2023, which introduced the Rs 5,000 cap, but its benefits were restricted solely to agricultural and residential plots.
Calling the latest cabinet approval a major relief, Jaiswal emphasized that extending the concession to commercial and industrial holdings will make intra-family business transfers more affordable, transparent, and legally streamlined. This step is expected to simplify succession planning for family-run enterprises and reduce litigation over property disputes.
Implementation and Impact
The revised rules will come into effect from the date of their publication in the state's official gazette. The policy is designed to protect the interests of families while ensuring that the state exchequer does not lose significant revenue, as these are non-commercial, familial transactions.
This proactive move by the Uttar Pradesh government is likely to be welcomed by a wide section of society, including small business owners, industrialists, and families looking to manage their assets efficiently. It reduces a major cost factor in estate planning and promotes hassle-free transfer of business assets across generations within the legal framework.
