Oct 27, 2017
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STAMP DUTY AND REGISTRATION

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STAMP DUTY REGISTRATION:

Merely possessing the property is not sufficient, one also needs to have legal evidence of ownership. Property needs to get registered in the local municipal records in the owner name, with the seller documenting, the property to be transferred to you.

At the time of registration, a stamp duty is paid, which is a government tax levied on property transactions.

Stamp duty is collected on the basis of property value at the time of registration.

Stamp duty’s amount varies from state to state and also property type—old or new. Since, stamp duty, adds up to the property cost, a fair idea of the amount must be roughly calculated, before finalizing the property deal.
Stamp duty is a legal tax payable in full and acts as an evidence for any sale or purchase of a property.

The levy of stamp duty is a state subject and thus the rates of stamp duty vary from state to state. The Centre levies stamp duty on specified instruments and also fixes the rates for these instruments.

Stamp dutyy payment and registration can be filed online as well.

What is stamp duty? 

Stamp duty is payable under Section 3 of the Indian Stamp Act, 1899. Stamp Duty must be paid in full and on time. If there is a delay in payment of stamp duty, it attracts penalty. A stamp duty paid on an instrument / document is considered a proper and legal instrument / document and also admitted as evidence in courts. Document not properly stamped, does not qualify as evidence by the court.

When is stamp duty payable?

Stamp Duty made payable before the execution of the documents or on the day of execution of document or on the next working day of executing such a document. Execution of the document means putting signature on the instrument by the buying party to the document.

What is the penalty charge?

Payment in delay of stamp duty attracts a penalty of 2% per month to the maximum of 200% of the deficit amount of stamp duty. Stamp papers are to be purchased in the name of either of the parties, i.e, seller or buyer involved in the agreement. It is said to be valid for a period of failing which will disable the stamp paper. It is said to be valid for six months from the date of purchase, only if the duty is paid on time.

Who is liable to pay?

In the absence of any agreement to the contrary, the purchaser/transferee has to pay stamp dutty or in case of exchange of properties, both parties have to bear stamp duty equally.

How should one sign an instrument affixed with adhesive stamp?

According to the provisions of Section 12, any person executing an instrument—affixed with adhesive stamp—shall cancel the adhesive stamp by writing on or across the stamp his name or initials. If such an adhesive stamp has not been cancelled in the aforesaid manner, the stamp be deemed as unstamped.

What is instrument?

Instrument means any document by which any right or liability there, or purports to be, created, transferred, limited, extended, extinguished or recorded. It is payable on instruments and not on transactions. Stampp duty should be charged on the basis of the contents of the instrument only. If any information essential for working out stamp duty is missing in the instrument, valuation officer can call for it. Information such as the area of the flat, number of the floors and year of construction must be mentioned in the agreement for quicker response.

How should instruments stamped with impressed stamp be written?

As per the provision of Section 13 of the Indian Stamp Act, 1899, any instrument on an impressed stamp, shall be written in such manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument i.e., cancel the adhesive stamp so affixed by writing on or across the stamp his name or initials. If such an adhesive stamp has not been cancelled in the aforesaid manner, such a stamp is deemed to be unstamped.

Stamp duty paid on which documents? 

Except transfer by Will (or by original nomination in a co-operative housing society) all transfer instruments / documents including agreements to sell, conveyance deed, gift deed, mortgage deed, exchange deed, deed of partition, power of attorneys, leave and license agreement, agreement of tenancy and lease deeds have to be properly stamped before registration.

Furthermore, a nominee transferring the flat subsequently in the name of legal heirs, the transfer instruments  stamped as per the market value.

If you have purchased a flat in a co-operative housing society on or after 10-12-1985 you have to pay the stamp duty on market value as per the Ready Reckoner.

A flat purchased through an agreement for sale on or before 9-12-1985 required stamp paper of Rs. 5 only. However a flat purchased on or before 9-12-1985 will require stamp duty on market value at the time of conveyance of the property in favour of the society.

The concept of payment of stamp duties on market value, introduced from 04-07-1980 and charged on agreement value only.

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