According to leading tax experts specialising in property matters, the amendment will result in higher incidence of capital gains tax on the seller as the proposed stamp duty rates -- which are based on the market price of the property -- are higher than the prevailing rates. The amendment will come into effect from April 1, 1999.

For instance, if a property is valued at Rs 15 lakh by the stamp duty authorities for the purpose of paying stamp duty, but the agreement is struck at Rs 10 lakh, then the seller will be forced to pay capital gains tax on the additional amount of Rs 12 lakh (after subtracting the indexed cost of acquisition - Rs 3 lakh).

The rate for capital gains tax is 20 per cent."The seller will end up paying extra capital gains tax for no fault of him only because the stampduty authorities have not revised their records", said Narayan Varma, a leading Mumbai-based chartered accountant.

At present, the stamp duty rates are fixed area-wise, depending on the valuation of property conducted by the stamp duty authorities. The `ready reckoner' of stamp duty rates is supposed to be revised atleast once in a year to take into account any change in the property prices, said Rajesh Kadakia, a chartered accountant.

However, according to real-estate sources, the state government has not revised these rates even after the property prices slumped in Mumbai by around 30-40 per cent in the last two years.

"The stamp duty authorities give a five per cent concession for property over Rs 10 lakh", said Mahableshwar Morje of Flat Owners' Association. He felt that the black money component will come down as the seller will be forced to take the same consideration which is disclosed in the agreement.

Also, since the stamp duty is levied only at the time of registration of the property, theseller will stand to lose, if the buyer registers the property after a year and pays higher stamp duty on account of upward revision of stamp duty rates.