The Bengal government has decided to extend the remission of stamp duty and reduction in the circle rate payable at the time of registration of immovable properties by another two months, extending a tax relief that is designed to jump-start real estate transactions.

An order issued by the state finance department late on Saturday evening noted the effective date for the tax benefits would be extended till March 31.

The relief was first announced in the state budget presented last July. The state government had cut the circle rate and stamp duty by 10 per cent and 2 per cent, respectively.

The measures were in place till October 30, but were extended till January 31 to lower costs for home buyers. Saturday’s announcement marks the second extension of the tax sops, which have led to a jump in the registration of home purchases in and around Calcutta as well as the rest of the state.

Stamp duty now stands at 4 per cent and 3 per cent in urban and rural areas for properties up to Rs 1 crore. It is levied at 5 per cent and 4 per cent for properties, respectively, above that ceiling.

The government order said the reliefs were aimed at boosting commercial activities and creating jobs.

“As the economic slowdown due to Covid-19 pandemic situation is still continuing, to give further boost to commercial activities, and also for continuation of relief to home buyers and generation of employment, it has been decided by the finance (revenue) department to extend the effective date of the … two notifications till March 31, 2022,” the government order read.

The real estate industry had been lobbying for an extension of the order because of the third Covid wave.

Thanking chief minister Mamata Banerjee for the extension of the tax breaks, Sushil Mohta, president of Credai, West Bengal, and chairman of Merlin Group, said he expected the volume of transactions to rise in the next two months as the Covid wave has started to subside.

He said there had been a lull in the registration of properties during poush mash when some consider it inauspicious to buy property.

Knight Frank India, an international real estate consultancy, said 44,940 residential units had been registered in 2021 after the cut in the stamp duty and circle rates – an increase of 64 per cent over the previous year’s figure.

It added that 56 per cent of these units were registered since the introduction of the stamp duty cut in July 2021.