Buying and owning property involves paying certain taxes. A lot of complication arises when these stipulated taxes are not paid on time. Civic authorities impose heavy fines, and those who appeal their cases in appellate courts can be stuck amid proceedings for a long time. Amnesty Schemes are a form of relief provided by the government for defaulters. This quick guide will help you understand what Amnesty Schemes are, how they benefit property owners and home buyers.
What are Amnesty Schemes?
Let’s start by understanding Amnesty Schemes. As mentioned earlier, Amnesty Schemes are an escape route for property-related tax defaulters. When a property buyer or owner defaults their stamp duty or property tax, the government authorities charge a minimum of 2% on the amount they haven’t paid every month. Thus, this 2% snowballs and the defaulters are expected to pay heavy fines for the period they default.
Amnesty schemes, when launched, offer a limited window to such defaulters to pay their dues with about 80% of the fines being excused. Amnesty schemes benefit both civic authorities as well as defaulters.
For example, this year, the Pune Municipal Corporation’s Amnesty Scheme for property tax defaulters with less than Rs. 50 lakh in penalties began on the 2nd of October. While it will end on the 30th of November, over 36,000 residents have already availed the scheme and paid their dues. That’s because the civic body has waived off 80% of the fine amount. Through this Amnesty Scheme, the Pune Municipal Corporation or the PMC is estimated to gather Rs. 1000 crore from 4,92,138 property tax defaulters in the city.
How does an Amnesty Scheme benefits?
Similar to the PMC Amnesty Scheme, there are other schemes launched by the various government authorities. For example, apart from city authorities like the PMC, last year, the Government of Maharashtra launched its own scheme called ‘Maharashtra Stamp Duty Amnesty Scheme 2019’ wherein the state authorities let go of a majority of outstanding fines on stamp duty.
If you are a property owner or buyer, Amnesty Schemes are your way out of changing your status as a defaulter. Usually, real-estate Amnesty Schemes are rolled out at the end of the financial year. So if you are a defaulter or are a new homeowner who hasn’t paid their stamp duty, then you should wait for Amnesty Schemes during the aforementioned period to clear your dues.
Amnesty Schemes are a win-win for the government as well as citizens. Especially with the coronavirus and its effects on the economy, these schemes will help those who have been unable to pay taxes due to lack of funds. Moreover, Amnesty Schemes even extend beyond the realm of real estate and cover income tax. Therefore, these schemes are being looked at as a measure of help from the civic authorities during these times.
If you want to know more about Amnesty Schemes that apply to you, visit the website of your city and state real estate authorities. Make the most of them if you are struggling financially this year. However, we advise you always try to pay your property taxes on time.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.