Patna: Property buyers and sellers in Bihar could face significantly higher penalties if they understate the value of land or buildings during registration. The Bihar Assembly has passed the Indian Stamp (Bihar Amendment) Bill, increasing the maximum penalty for stamp duty evasion from 10% to 100%.
According to the state government, the amendment is intended to curb revenue losses arising from the undervaluation of properties during registration. The Assembly also approved the Bihar Ease of Doing Business Bill, 2026 and the Bihar Urban Development Bill, 2026, which the government said are aimed at improving the investment climate and supporting urban expansion.
Penalty for Understating Property Value Increased
Presenting the legislation in the Assembly, Prohibition and Registration Minister Madan Sahni said the earlier law allowed for a penalty of only 10% in cases where stamp duty was paid on a value lower than the property’s actual market value.
Under the amended law, the penalty can now be as high as 100%, substantially increasing the financial consequences for those found to have undervalued property to reduce stamp duty.
According to the minister, the change is intended to discourage deliberate attempts to evade registration charges.
More Officials Empowered to Act
The amendment also expands the authority to investigate and act on cases involving suspected undervaluation.
Previously, such cases could only be decided by the District Collector. Under the new provisions, the Divisional Assistant Inspector General of Registration has also been authorised to examine these matters and take action where required.
The government said the move is expected to speed up the disposal of such cases.
Focus on Misclassification of Commercial Land
Officials said one of the concerns prompting the amendment was the alleged practice of registering commercial plots as agricultural land to benefit from lower stamp duty rates.
According to the government, the revised law is designed to curb such practices and strengthen action against revenue evasion linked to property transactions.
Assembly Also Clears Ease of Doing Business Bill
The Assembly also passed the Bihar Ease of Doing Business Bill, 2026, which the government said is aimed at making it easier for businesses to establish operations in the state.
Industries Minister Shreyasi Singh said the legislation introduces a single-window clearance system, enabling investors to obtain approvals related to land, electricity and other government services through a unified platform rather than approaching multiple departments separately.
The government said the measure is intended to reduce procedural delays and encourage investment.
Urban Development Bill Approved
Lawmakers also approved the Bihar Urban Development Bill, 2026.
According to the government, the legislation is intended to support planned urbanisation, facilitate the implementation of urban infrastructure projects and assist in the expansion of urban local bodies as Bihar’s towns and cities continue to grow.
Further details on the implementation of both new laws are expected to be notified by the state government.
