In a significant financial move to strengthen urban infrastructure, the Maharashtra government has approved the distribution of ₹500 crore to municipal corporations across the state. The funds have been allocated from the 1% stamp duty surcharge collected during FY 2025–26.
The decision was issued through a Government Resolution (GR) by the Urban Development Department on March 30, 2026.
What is the 1% Stamp Duty Surcharge?
Under amendments to the Maharashtra Municipal Corporation Act (1949) and the Maharashtra Stamp Act (1958), a 1% surcharge is levied on stamp duty for property transactions such as:
- Property sale
- Gift deeds
- Mortgage transactions
👉 This surcharge applies specifically to urban properties within municipal corporation limits and is meant to support urban local bodies financially.
₹500 Crore to Be Distributed Across 28 Municipal Corporations
The state government has approved ₹500 crore (₹5 billion) to be distributed among 28 municipal corporations.
These funds are unconditional grants, aimed at boosting urban infrastructure development and financial stability of local bodies.
Top Beneficiaries of the Fund Allocation
Among the major allocations:
- 🏙️ Pune Municipal Corporation – ₹1,458 crore (highest share)
- 🏙️ Thane Municipal Corporation – ₹553 crore
- 🏙️ Pimpri-Chinchwad – ₹671 crore
- 🏙️ Nashik – ₹270 crore
- 🏙️ Mira-Bhayandar – ₹338 crore
- 🏙️ Vasai-Virar – ₹235 crore
- 🏙️ Navi Mumbai – ₹243 crore
Other cities such as Nagpur, Aurangabad, Kolhapur, Solapur, and Kalyan-Dombivli also received significant allocations.
Special Deduction in Ulhasnagar Case
A notable exception in the distribution is Ulhasnagar Municipal Corporation, where:
- ₹23.64 lakh has been deducted from its allocation
- This deduction is due to pending interest payments under the UIDF (Urban Infrastructure Development Fund) scheme
👉 The deducted amount will be adjusted directly by the government.
How Will the Funds Be Used?
The funds are expected to support:
✔️ Urban infrastructure projects ✔️ Civic amenities and services ✔️ Financial strengthening of municipal corporations
The government has clarified that the funds are non-conditional, allowing local bodies flexibility in utilization.
Disbursement Timeline & Process
- Funds will be transferred directly to the DDO accounts of municipal corporations
- Disbursement must be completed before March 31, 2026
- Officials have been instructed to ensure immediate fund transfer
Policy & Financial Framework
The expenditure will be booked under:
📊 Budget Head: 3604 – Compensation & Assignments to Local Bodies 📊 Linked to stamp duty surcharge compensation mechanism
The decision has been approved in consultation with the Finance Department.
Why This Matters
This move is crucial because:
👉 Municipal corporations rely heavily on state transfers for funding 👉 It ensures steady cash flow for infrastructure projects 👉 Helps cities cope with rapid urbanisation and rising service demands
With increasing real estate transactions, stamp duty surcharge has become a key revenue stream for urban development.
The Big Picture
The ₹500 crore allocation reflects the Maharashtra government’s continued push toward:
- Strengthening urban local bodies
- Improving infrastructure financing mechanisms
- Leveraging real estate-driven revenues for city development
As cities expand and demand for infrastructure rises, such financial support will play a critical role in shaping urban growth across Maharashtra.
Also Read: ₹1,500 Crore Disbursed from Stamp Duty Surcharges to MMRDA, & Metro Projects
