Stamp Duties in Indian States: A Case for Reform
The authors review the options for reform of stamp duties on immovable property transfers collected by Indian state governments. After briefly reviewing some of the many administrative difficulties experienced with the tax, they turn to an examinat...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5168252/stamp-duties-indian-states-case-reform http://hdl.handle.net/10986/14240 |
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okr-10986-142402021-04-23T14:03:21Z Stamp Duties in Indian States: A Case for Reform Alm, James Annez, Patricia Modi, Arbind ADMINISTRATIVE COSTS CAPITAL GAINS CAPITAL GAINS TAX CAPITALIZATION CHANGE IN QUANTITY DEMANDED COMPLIANCE COSTS CONSOLIDATION CONSUMERS COST SAVINGS DEBENTURES DECENTRALIZATION DEMOGRAPHIC TRANSITION DEVELOPMENT AUTHORITIES DISTRIBUTION OF INCOME ECONOMIC EFFECTS ECONOMIC GROWTH ELASTICITIES ELASTICITY OF DEMAND EQUILIBRIUM EVASION EXCHANGE RATE EXCISE DUTIES EXCISE TAX EXCISE TAXES HOUSING INCOME GROUPS INCOME TAX INSURANCE INTERGOVERNMENTAL TRANSFERS LEGAL PROTECTION LOCAL GOVERNMENT LOCAL GOVERNMENTS MANDATES MARKET VALUE MUNICIPAL FINANCE PERVERSE INCENTIVES POLICY MAKERS PROPERTY RIGHTS PROPERTY TAX PROPERTY TAXES PROPERTY TRANSFER TAXES PROPERTY TRANSFERS PROPERTY VALUES PUBLIC FINANCE REAL ESTATE MARKETS RESERVE BANK OF INDIA RESOURCE ALLOCATION REVENUE PERFORMANCE REVENUE SOURCES SALES TAXES SAPS SAVINGS SLUMS STAMP DUTIES STAMP PAPER STAMP TAXES STATE ELECTIONS STATE GOVERNMENT STATE GOVERNMENTS TAX TAX ADMINISTRATION TAX BASE TAX BURDEN TAX COLLECTION TAX LIABILITY TAX RATES TAX REFORM TAX REFORMS TAX REVENUE TAX REVENUES TAXATION TOTAL TAX REVENUE TREASURY URBAN AREAS URBANIZATION The authors review the options for reform of stamp duties on immovable property transfers collected by Indian state governments. After briefly reviewing some of the many administrative difficulties experienced with the tax, they turn to an examination of its economic impacts. A review of stamp duties internationally indicates that Indian rates are exceptionally high, at rates often above 10 percent. Most countries' rates are less than 5 percent, including a number of low and middle-income developing countries. With these high rates, the authors find that while the tax has become the third largest revenue source for many Indian states, it imposes high compliance costs on taxpayers, has been subject to a good deal of evasion and fraud, and the distortionary impacts appear to be large, reducing the responsiveness of real estate markets in Indian cities by discouraging transactions essential to the efficient growth of cities. The authors then study the revenue implications of lowering stamp duty rates, which need to be understood if reform is to be viable. Evidence indicates that the current high duty rates, coupled with weak tax administration, lead to widespread evasion of the tax through under-declaration. This under-declaration of property values directly affects collection of other taxes, among them, property taxes and capital gains tax. Moreover, it indirectly affects the collection of all taxes through the impact of under-declaration on the circulation of black money. Simulations indicate that revenues lost due to a lowering of stamp duty rates closer to international levels are quite likely to be recovered in higher collections of other taxes. However, these taxes would at least in part be collected by other levels of government. So reform could be made a more viable option through appropriately designed intergovernmental transfers. 2013-06-27T17:33:45Z 2013-06-27T17:33:45Z 2004-09 http://documents.worldbank.org/curated/en/2004/09/5168252/stamp-duties-indian-states-case-reform http://hdl.handle.net/10986/14240 English en_US Policy Research Working Paper;No.3413 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research South Asia India |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADMINISTRATIVE COSTS CAPITAL GAINS CAPITAL GAINS TAX CAPITALIZATION CHANGE IN QUANTITY DEMANDED COMPLIANCE COSTS CONSOLIDATION CONSUMERS COST SAVINGS DEBENTURES DECENTRALIZATION DEMOGRAPHIC TRANSITION DEVELOPMENT AUTHORITIES DISTRIBUTION OF INCOME ECONOMIC EFFECTS ECONOMIC GROWTH ELASTICITIES ELASTICITY OF DEMAND EQUILIBRIUM EVASION EXCHANGE RATE EXCISE DUTIES EXCISE TAX EXCISE TAXES HOUSING INCOME GROUPS INCOME TAX INSURANCE INTERGOVERNMENTAL TRANSFERS LEGAL PROTECTION LOCAL GOVERNMENT LOCAL GOVERNMENTS MANDATES MARKET VALUE MUNICIPAL FINANCE PERVERSE INCENTIVES POLICY MAKERS PROPERTY RIGHTS PROPERTY TAX PROPERTY TAXES PROPERTY TRANSFER TAXES PROPERTY TRANSFERS PROPERTY VALUES PUBLIC FINANCE REAL ESTATE MARKETS RESERVE BANK OF INDIA RESOURCE ALLOCATION REVENUE PERFORMANCE REVENUE SOURCES SALES TAXES SAPS SAVINGS SLUMS STAMP DUTIES STAMP PAPER STAMP TAXES STATE ELECTIONS STATE GOVERNMENT STATE GOVERNMENTS TAX TAX ADMINISTRATION TAX BASE TAX BURDEN TAX COLLECTION TAX LIABILITY TAX RATES TAX REFORM TAX REFORMS TAX REVENUE TAX REVENUES TAXATION TOTAL TAX REVENUE TREASURY URBAN AREAS URBANIZATION |
| spellingShingle |
ADMINISTRATIVE COSTS CAPITAL GAINS CAPITAL GAINS TAX CAPITALIZATION CHANGE IN QUANTITY DEMANDED COMPLIANCE COSTS CONSOLIDATION CONSUMERS COST SAVINGS DEBENTURES DECENTRALIZATION DEMOGRAPHIC TRANSITION DEVELOPMENT AUTHORITIES DISTRIBUTION OF INCOME ECONOMIC EFFECTS ECONOMIC GROWTH ELASTICITIES ELASTICITY OF DEMAND EQUILIBRIUM EVASION EXCHANGE RATE EXCISE DUTIES EXCISE TAX EXCISE TAXES HOUSING INCOME GROUPS INCOME TAX INSURANCE INTERGOVERNMENTAL TRANSFERS LEGAL PROTECTION LOCAL GOVERNMENT LOCAL GOVERNMENTS MANDATES MARKET VALUE MUNICIPAL FINANCE PERVERSE INCENTIVES POLICY MAKERS PROPERTY RIGHTS PROPERTY TAX PROPERTY TAXES PROPERTY TRANSFER TAXES PROPERTY TRANSFERS PROPERTY VALUES PUBLIC FINANCE REAL ESTATE MARKETS RESERVE BANK OF INDIA RESOURCE ALLOCATION REVENUE PERFORMANCE REVENUE SOURCES SALES TAXES SAPS SAVINGS SLUMS STAMP DUTIES STAMP PAPER STAMP TAXES STATE ELECTIONS STATE GOVERNMENT STATE GOVERNMENTS TAX TAX ADMINISTRATION TAX BASE TAX BURDEN TAX COLLECTION TAX LIABILITY TAX RATES TAX REFORM TAX REFORMS TAX REVENUE TAX REVENUES TAXATION TOTAL TAX REVENUE TREASURY URBAN AREAS URBANIZATION Alm, James Annez, Patricia Modi, Arbind Stamp Duties in Indian States: A Case for Reform |
| geographic_facet |
South Asia India |
| relation |
Policy Research Working Paper;No.3413 |
| description |
The authors review the options for
reform of stamp duties on immovable property transfers
collected by Indian state governments. After briefly
reviewing some of the many administrative difficulties
experienced with the tax, they turn to an examination of its
economic impacts. A review of stamp duties internationally
indicates that Indian rates are exceptionally high, at rates
often above 10 percent. Most countries' rates are less
than 5 percent, including a number of low and middle-income
developing countries. With these high rates, the authors
find that while the tax has become the third largest revenue
source for many Indian states, it imposes high compliance
costs on taxpayers, has been subject to a good deal of
evasion and fraud, and the distortionary impacts appear to
be large, reducing the responsiveness of real estate markets
in Indian cities by discouraging transactions essential to
the efficient growth of cities. The authors then study the
revenue implications of lowering stamp duty rates, which
need to be understood if reform is to be viable. Evidence
indicates that the current high duty rates, coupled with
weak tax administration, lead to widespread evasion of the
tax through under-declaration. This under-declaration of
property values directly affects collection of other taxes,
among them, property taxes and capital gains tax. Moreover,
it indirectly affects the collection of all taxes through
the impact of under-declaration on the circulation of black
money. Simulations indicate that revenues lost due to a
lowering of stamp duty rates closer to international levels
are quite likely to be recovered in higher collections of
other taxes. However, these taxes would at least in part be
collected by other levels of government. So reform could be
made a more viable option through appropriately designed
intergovernmental transfers. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Alm, James Annez, Patricia Modi, Arbind |
| author_facet |
Alm, James Annez, Patricia Modi, Arbind |
| author_sort |
Alm, James |
| title |
Stamp Duties in Indian States: A Case for Reform |
| title_short |
Stamp Duties in Indian States: A Case for Reform |
| title_full |
Stamp Duties in Indian States: A Case for Reform |
| title_fullStr |
Stamp Duties in Indian States: A Case for Reform |
| title_full_unstemmed |
Stamp Duties in Indian States: A Case for Reform |
| title_sort |
stamp duties in indian states: a case for reform |
| publisher |
World Bank, Washington, D.C. |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/09/5168252/stamp-duties-indian-states-case-reform http://hdl.handle.net/10986/14240 |
| _version_ |
1764430681610387456 |