The reductions in stamp duty valuation will also take into account the depreciation of the buildings. For 10-year old buildings the valuation may be calculated at 10 per cent less the current market value of the property.

For 11 to 20-year-old buildings the rate of depreciation would be around 20 per cent and for buildings of over 30-40 years old a 35 per cent depreciation rate would be considered.

The stamp duty valuation for open land is proposed as follows: The entire city of Mumbai will be divided into 171 parts. This will include all areas upto Dahisar in the western suburbs, Mulund in the central suburbs and Chembur on the Harbour line. Some of the pockets identifiedwithin Mumbai would be Koli villages, Manori village and Oshiwara village.

Each geographical area will have its own valuation depending on going market rates. About 10 per cent of the value of the land will be considered as the stamp duty of the particular area.

Sources in the stamp office say that some concessions will be offered on the stamp duty levies in the rural areas (that is, in Maharahstra, outside Mumbai, areas such as Panvel and Karjat).

According to advocate Vinod C Sampat, secretary of the registration of fee and stamp duty payers association, the stamp duty valuations should be linked to the market rate.

"When there is a slump in the market they should make the necessary reductions in their valuations also. To have uniform rates all through the year is not fair as in the last three years the property prices have fallen by nearly 40 per cent in some areas," he said.

Sampat adds that as per the valuations of the stamp duty authorities the rates at Nariman Point are still at Rs 20,000whereas current prices of prime property in the area are ranging around Rs 9,000. On an average the depreciation of land value has been around 25 per cent a year due to the availability of TDR, FSI, and other recessionary factors.

The stamp authorities have fixed values of properties for different localities based on the information accumulated by them. Thereafter the value is decided by them on the percentage for earlier years. To decide on the stamp duty rates on August 14, 1995, the Bombay Stamp (Detection of Market Values of Property) Rules 1995 have been formed.

As per these rules, the Chief Controlling Revenue Authority (CCRA) shall by an order issue annual statement of rates showing average rates of land and building situated in every Tahsil, Municipal Corporation and local area. It is for this annual declaration that the rates are being finalised.