What is stamp
duty & why it should be paid ?
Stamp duty is a tax, similar
to income tax and sales tax, collected by the
government. The stamp duty is paid by the buyer
of the property. It is payable on the market
value of the property or agreement value, whichever
agreement of a property does not become legal
until it is executed by the government, for which
you need to pay the stamp duty. Also, only instruments
that are properly stamped can be admitted as evidence
of stamp duty :
Is fixed by the government
and varies from locality. It is the minimal amount
property must be valued at and is calculated per
assesses the market value of property every year,
and the revised rate, fixed by the state government
and published in the Ready Reckoner, has been
applicable since Jan 1, 2007.
assessments are also made on the basis of the
Ready Reckoner with builder and property brokers
using it to peg prices.
is stamp duty payable ?
It is payable before or
on the day of execution of the document, or on
the next working day.
is a delay in payment, it attracts penalty at
the rate of two per cent a month on the deficit
amount of the stamp duty. The maximum penalty
is 200 per cent of the deficit amount of stamp
of owning a house :
registration, the document should be typed/printed
on one side only and submitted along with
a photocopy of the original to the Registering
Officer. The copy should be photocopied
only on one side, with a butter paper
in-between copies – to prevent the
typed matter from getting smudged. The
copies need to be bound in a particular
manner as well.
duty, according to government valuation
or actual consideration, whichever is higher,
is required to be paid on the same day or
a day before registration. The document
is prepared on a stamp paper or franked
at a bank or a sub-registrar’s office.
certificate (NOC) from the society is applicable
if the property is located in a co-operative
society. Or if the society is not formed,
the purchaser needs to obtain the NOC from
document should be registered within four
months of signing the document. Else, the
registrar can complete the formality subject
to payment of a fine. The fine cannot exceed
10 times the registration fee.
registration purposes both the buyer and
seller need to be physically present before
the sub-registrar or the competent authority.
The clerk stamps and numbers the document
and forwards it to the registrar for his/her
states, a photograph of the buyer and seller
is taken along with their thumb impression
document is then scanned and the buyer gets
the original copy the same day. This may
vary from state to state, taking three to
receipt should be preserved. At any time
in the future if a reference need to be
made, the original receipt is required to
be produced to the registrar.
consultants claim to get the market value reduced
to save a substantial amount of stamp duty. Is
this correct ?
Many people are under the
impression that some consultants can help them
in reducing the stamp duty. We would like to warm
them that this can be done only by furnishing
misleading information like lesser area of premises
or flat, longer age of building and a building
with a lift as not having a lift.
prove to be very detrimental and harmful when,
in future, they receive a notice from the department
for under valuation due to concealment of facts.
Even a registered document can be reopened anytime
within ten years from the date of registration
and adjudicated documents within six years from
the date of adjudication. Please note that writing
misleading information in the agreement is an
offence under the Stamp Act, which is punishable
with fine and imprisonment.