Delhi government on Monday revised the circle rates for sale and purchase of properties in the capital, effecting a substantial increase for all colonies across the city which may result in rise in property prices.

The Delhi cabinet, presided over by chief minister Sheila Dikshit, has fixed Rs 9,000 per square metre as the lowest rate while the upper limit will be Rs 1,25,000 per sq m.

The circle rate is the minimum rate for valuation of land for residential use that differs for various categories of colonies.

The cabinet also decided to do away with fixing the rates based on categories of colonies decided by the MCD and prepared a fresh list of 2,480 colonies for which rates have been finalised considering the available infrastructure and other parameters.

As per the revised rates, Rs 1.25 lakh per sq m has been fixed for posh colonies like Defence Colony, Greater Kailash, Gulmohar Park, Panchsheel Enclave, Anandlok, Green Park, Hauz Khas and Nehru Place.

Currently, the circle rate is Rs 43,000 per sq m for posh colonies falling in the category A.

"We have decided to abolish the existing eight categories of colonies. The revenue department has identified 2,480 colonies for which the new rates have been fixed," chief minister Sheila Dikshit said.

The new circle rates will be fixed according to the properties falling under various categories.

The cabinet has increased the minimum circle rate of Rs 6,900 to Rs 9,000.

Revenue minister Raj Kumar Chouhan said the new rates will come into effect within next 20 days.

"The new rates will come into force after issuance of a notification," he said.

Officials said the increased rates may see property rates going up. They said with the increase in circle rates, government will also earn more from the registration fee of the properties.

For New Friends Colony, Inder Puri, Kailash Colony Krishna Nagar, Model Town, Patel Nagar and Yusuf Sarai, the rates will be Rs 43,500, officials said.

The government has also fixed rates for colonies falling under mixed land use categories where commercial establishments have come up. The cabinet decided on separate rates for commercial establishments, restaurants and industrial units in such colonies.

For example, for an industry, the rates will be 2.5 times higher than the normal rates fixed.

"Now the mixed land use colonies have been made residential colonies for the circle rates but rates will be different for commercial establishments," said Chouhan.

Officials said the increased rates may see property rates going up. They said with the increase in circle rates, government will also earn more from the registration fee of the properties.

At present there are eight categories of colonies in the capital -- A, B, C, D, E, F, G and H and the rates vary depending on the category.

The minimum rate for valuation of land for residential use is Rs 43,000 per sq metre for category A, while it is Rs 34,100 per sq m for category B. For category C, it is Rs 27,300 per sq m, for category D, Rs 21,800 per sq m, for category E, Rs 18,400 per sq m, for category F, Rs 16,100 per sq m, for category G, Rs 13,700 per sq m and for category H, Rs 6,900 per sq m.

Chouhan said the existing rate of Rs 34,100 has been increased to Rs 68,500 for certain colonies while existing circle rate of Rs 27,300 in some certain other colonies has been hiked to Rs 54,500.

The circle rates were first introduced in Delhi in 2007 and were notified under the provisions of Delhi Stamp (Prevention of Undervaluation of Instruments) Rules 2007. The rates were then notified to simplify the assessment of stamp duty and bring in transparency and efficiency in the process of registration.

Chouhan said divisional commissioners of various districts would notify rates for colonies if some of them were left out in the list of 2,480 colonies.