WHAT is stamp duty? Why should it be paid and by when?It is a tax and must be paid in full and on time. A delay attracts penalty at 2% per month, subject to maximum penalty of 200% of the deficit amount of stamp duty. Documents lodged with the sub-registrar/superintendent of stamps prior to any amnesty scheme attract a lump sum reduced penalty. Documents not properly stamped are not admitted in court as evidence. It is payable before execution of the document or on the day of execution of document or on the next working day. Execution of a document means putting signatures on the instrument by persons party to the document.
Who pays?In the absence of an agreement to the contrary, the purchaser/transferee has to pay or in case of property exchange, both parties have to bear it equally.
On what instruments does stamp duty have to be paid?Instruments include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of shares, debentures proxy and receipt (which is charged under Indian Stamp Act, 1899). Except transfer by will (or by original nomination in a co-operative society) all transfer documents including agreements to sell, conveyance deed, gift deed, mortgage deed, exchange deed, deed of partition, power of attorneys, leave and licence agreement, agreement of tenancy, lease deeds, power of attorney to sell for consideration etc. have to be properly stamped. When a nominee transfers the flat subsequently in the name of legal heir, such transfer also requires stamp duty.
If you have purchased a flat in a co-operative society on or after December 10 1985, you have to pay stamp duty on market value as per the Ready Reckoner, issued every year in January.
1.This is a public document, available in any law bookshop. Market value is the value as worked out as per the Stamp Duty Ready Reckoner or the consideration stated in the instrument, whichever is higher. As per a new amendment in the Income Tax act, market value for the purpose of capital gain tax is the same as the market value for stamp duty payment.
How is a flat defined?A flat means a separate and self-contained set of premises used or intended to be used for residence, or office, or showroom, or shop or godown or for carrying on any industry or business (and includes a garage), the premises forming part of a building and includes an apartment.
In whose name is the stamp paper required to be purchased?Stamp papers are to be purchased in the name of one of the parties to the document, otherwise such agreement will be treated as if no stamp paper was used. However, it will not make the agreement invalid and can be enforced in Law if proper duty is paid subsequently. Stamp paper is valid for six months from the date of purchase.
What is a revenue stamp?It is a tax of Re.1 in the form of revenue stamp, which should be affixed on receipt for any money or other property, the amount or value of which exceeds Rs. 5,000.
Is stamp duty payable on the instrument or transaction?It is payable on instruments. If any information essential for working out stamp duty is missing, the valuation officer can call for it. Information such as the Carpet or Built-up area, number of floors in the building, year of construction, name of Division/Village and C.S./C.T.S. number of plot of land, must be recorded in the agreement for quicker response.
What is the rate of stamp duty?Stamp duty on non-residential properties whether in a co- operative society or not is at a flat rate of 5% of the market value. Stamp duty on residential flats in a housing society and buildings covered under Article 25(d) of Schedule I of Bombay Stamp Act. 1958, attracts concessional rates depending upon its market value as follows: Upto Rs. 1,00,000 stamp duty is nil Between Rs. 1,00,001 to Rs.2,50,000, it is 0.5% of the value. Between Rs. 2,50,001 to Rs.5,00,000 Stamp duty is Rs. 1,250 + 3% of the value above Rs.2,50,000. Above Rs.5,00,000 stamp duty is Rs.8,750 + 5% of the value above Rs.5,00,000.
What precautions should one take to avoid practical difficulties later?Generally one copy of the exchange agreement is made and registered and then there are various practical problems.
The following precautions should be taken to avoid complications. - Assuming there is one 'Flat-A' owned by 'Person AA' and he wants to exchange it with 'Flat-B' owned by 'Person BB'. In the Exchange Agreement there should be a clause where it states that original agreement will be considered original agreement for 'Flat-A' and will remain with it's new owner 'Person BB' and second copy will be considered original agreement for 'Flat-B' and will remain with its new owner 'Person AA'. - Agreements should be made in duplicate. The original agreement will be charged with full stamp duty and second copy will be charged only with Rs.20. - Both agreements must be registered. The original agreement will be charged full registration fees and second copy will be charged a nominal amount. - Both the persons must keep their respective copies and will be free from each other in all respects.
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Who pays?In the absence of an agreement to the contrary, the purchaser/transferee has to pay or in case of property exchange, both parties have to bear it equally.
On what instruments does stamp duty have to be paid?Instruments include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of shares, debentures proxy and receipt (which is charged under Indian Stamp Act, 1899). Except transfer by will (or by original nomination in a co-operative society) all transfer documents including agreements to sell, conveyance deed, gift deed, mortgage deed, exchange deed, deed of partition, power of attorneys, leave and licence agreement, agreement of tenancy, lease deeds, power of attorney to sell for consideration etc. have to be properly stamped. When a nominee transfers the flat subsequently in the name of legal heir, such transfer also requires stamp duty.
If you have purchased a flat in a co-operative society on or after December 10 1985, you have to pay stamp duty on market value as per the Ready Reckoner, issued every year in January.
1.This is a public document, available in any law bookshop. Market value is the value as worked out as per the Stamp Duty Ready Reckoner or the consideration stated in the instrument, whichever is higher. As per a new amendment in the Income Tax act, market value for the purpose of capital gain tax is the same as the market value for stamp duty payment.
How is a flat defined?A flat means a separate and self-contained set of premises used or intended to be used for residence, or office, or showroom, or shop or godown or for carrying on any industry or business (and includes a garage), the premises forming part of a building and includes an apartment.
In whose name is the stamp paper required to be purchased?Stamp papers are to be purchased in the name of one of the parties to the document, otherwise such agreement will be treated as if no stamp paper was used. However, it will not make the agreement invalid and can be enforced in Law if proper duty is paid subsequently. Stamp paper is valid for six months from the date of purchase.
What is a revenue stamp?It is a tax of Re.1 in the form of revenue stamp, which should be affixed on receipt for any money or other property, the amount or value of which exceeds Rs. 5,000.
Is stamp duty payable on the instrument or transaction?It is payable on instruments. If any information essential for working out stamp duty is missing, the valuation officer can call for it. Information such as the Carpet or Built-up area, number of floors in the building, year of construction, name of Division/Village and C.S./C.T.S. number of plot of land, must be recorded in the agreement for quicker response.
What is the rate of stamp duty?Stamp duty on non-residential properties whether in a co- operative society or not is at a flat rate of 5% of the market value. Stamp duty on residential flats in a housing society and buildings covered under Article 25(d) of Schedule I of Bombay Stamp Act. 1958, attracts concessional rates depending upon its market value as follows: Upto Rs. 1,00,000 stamp duty is nil Between Rs. 1,00,001 to Rs.2,50,000, it is 0.5% of the value. Between Rs. 2,50,001 to Rs.5,00,000 Stamp duty is Rs. 1,250 + 3% of the value above Rs.2,50,000. Above Rs.5,00,000 stamp duty is Rs.8,750 + 5% of the value above Rs.5,00,000.
What precautions should one take to avoid practical difficulties later?Generally one copy of the exchange agreement is made and registered and then there are various practical problems.
The following precautions should be taken to avoid complications. - Assuming there is one 'Flat-A' owned by 'Person AA' and he wants to exchange it with 'Flat-B' owned by 'Person BB'. In the Exchange Agreement there should be a clause where it states that original agreement will be considered original agreement for 'Flat-A' and will remain with it's new owner 'Person BB' and second copy will be considered original agreement for 'Flat-B' and will remain with its new owner 'Person AA'. - Agreements should be made in duplicate. The original agreement will be charged with full stamp duty and second copy will be charged only with Rs.20. - Both agreements must be registered. The original agreement will be charged full registration fees and second copy will be charged a nominal amount. - Both the persons must keep their respective copies and will be free from each other in all respects.
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Stamp duty India is a tax, much like the sales tax and income tax that are collected by the Government. All such taxes must be paid in full and on time. If you make delay in the payment then you have to face the penalty. Penalty involves fine or even imprisonment. If you want to produce any instrument or document in the court, it needs to be done on the stamp paper only then it is considered valid and can be used as an evident. The court cannot admit instruments or documents that are not properly stamped as evidence.If you want to know the market value of your property and the stamp duty amount on it, you need to contact the Ready Reckoner as follows:
You should know the division/village name and C.S. /C.T.S. number of your property.
From the Ready Reckoner, locate your valuation zone and sub-zone with the help of the division/village name and C.S./C.T.S. number of your property.
From the table know your rate per square meter, then multiply the rate with the built up area of your property in square meters. You will get a value. Reduce or increase this value for lift and depreciation as per the valuation factors given in the Ready Reckoner and you will get a market value. Find out the stamp duty amount applicable to you as per the market value.The office of the Superintendent of Stamps Department also does this procedure for you for a nominal fee.
The process through which we calculate the value of property and then its market value and ascertaining the proper stamp duty is called adjudication.
For adjudication, one can apply to the Collector of Stamps along with copy of the agreement containing the details of the property.
You should go for replacement value insurance if you want to reiterate. It is necessary that you make it clear that insurance companies have covered both your home and its contents under replacement-value insurance.
The adjudication fee payable is Rs.100.
In case of a signed document, adjudication must be done within one month otherwise two percent interest per month will be levied as penalty from the date of signature.
An adjudicated unsigned document is valid up to six months from the date of adjudication order up to December 31 of that year whichever is earlier.
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You should know the division/village name and C.S. /C.T.S. number of your property.
From the Ready Reckoner, locate your valuation zone and sub-zone with the help of the division/village name and C.S./C.T.S. number of your property.
From the table know your rate per square meter, then multiply the rate with the built up area of your property in square meters. You will get a value. Reduce or increase this value for lift and depreciation as per the valuation factors given in the Ready Reckoner and you will get a market value. Find out the stamp duty amount applicable to you as per the market value.The office of the Superintendent of Stamps Department also does this procedure for you for a nominal fee.
The process through which we calculate the value of property and then its market value and ascertaining the proper stamp duty is called adjudication.
For adjudication, one can apply to the Collector of Stamps along with copy of the agreement containing the details of the property.
You should go for replacement value insurance if you want to reiterate. It is necessary that you make it clear that insurance companies have covered both your home and its contents under replacement-value insurance.
The adjudication fee payable is Rs.100.
In case of a signed document, adjudication must be done within one month otherwise two percent interest per month will be levied as penalty from the date of signature.
An adjudicated unsigned document is valid up to six months from the date of adjudication order up to December 31 of that year whichever is earlier.
ALL INDIA RATES OF STAMP DUTY
IMMOVABLE PROPERTIES
more
Flat owners told to pay stamp duty arrears of earlier tenants8 Aug 2008, 0436 hrs IST, Nauzer Bharucha ,TNN
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MUMBAI: Thousands of flat owners queuing up everyday to take advantage of the state government's stamp duty amnesty scheme have been left totally confused due to the lack of clarity in its implementation.
As per the scheme, which commenced in June, flat owners have until September 8 to pay stamp duty at the rate that was applicable when the property was bought.
But what comes as a major jolt to many is a little known 2006 circular issued by the state inspector general of registration and controller of stamps which holds that the current owner is liable to pay the unpaid stamp duty of the previous occupant of the flat at the current market value. "If there has been a chain of transactions involving a flat over the past two decades and no stamp duty has been paid as required under the sale deed, the present owner must pay the stamp duty on all the earlier sale deeds,'' said Ramesh Prabhu, chairman of the Maharashtra Societies Welfare Association. "Not many people know that such a circular exists,'' he added.
A senior official of the stamp duty and registration department at the old Custom House in south Mumbai told TOI that it was the duty of the owner to find out all the details of the property that he\she was purchasing.
4 comments:
I bought property on an illegal premises. The land belongs to the Railways and the construction of the buiding was done by one Mohammed Rafique. I purchased the said property form him in the year 1978.
Nobody till date has asked me to vacate the premises. Nobody has asked me to pay any taxes and if some municipal person comes around I send him away with chai (and gaalis [badwords] if needs be).
I am the legal owner as I have a ration cald, election I caed, I have named the property myself and als have an electricty connection registered in my name.
There has been no stamp duty or conveyance deed in the picture.
My question is whether is it required for me to pay anything to anyone to live in peace in the place where I an stying for the last 30 years ? (this stamp duty and conveyand bullshit ?)
My brother who bought a place in Andheri faces much problem on this and even has to pay Stamp duty for earlier transactions for the property before he bought the same. You would agree that this was an unknown law for payment of stamp duty and conveyance deed for quite sometime. He has paid the stamp duty from the purchaser but he is being advised to pay stamp duty alsio for all the previous purchasers of the property who have not paid stamp duty till date.
(This comes with a free penalty of 2% per month i.e 24% p.a.)
I am happy I have no such problems except I want clarifications to the above.
Thanks
Mohammed Kasim
One day u may have to surrender your land
Lucky you.. Mohd Kasim
While others are shelling out precious money to keep what they have bought and moreover being taxed for it .. oyu have got free property, no taxes, no headache.
Even if one day that property goes away, you havn't spent anything on it anyways.
While the middle income earner is paying heavy rent in Mumbai (as one cannot afford a house easily), you have got to pay nothing !!!!
Cool.. you're the luckiest I should say. I dont know what the government can say or do about that ....
how does an insurance company file stamp duty return? also is it mandatory and under what provisions?
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