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.
It is usually paid by the buyer with regardless to agreement and in case of property exchange, both seller and the buyer has to share the stamp duty equally.Stamp duty is generally paid on instruments, where any financial obligation is required to be created, transferred, limited, extended, extinguished or recorded excluding a bill of exchange, cheque, promisory 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).
Transfer documents namely sale agreement, conveyance deed, gift deed, mortgage deed, exchange deed, deed of partition, power of attorneys, leave and licence agreements, agreements of tenancy, lease deeds, power of attorney to sell for consideration etc. must be stamped in the right way, booting out transfer by will. Any delay in duty payment will pull in 2 per cent per month to the maximum of 200 per cent of the deficit amount of stamp duty.In case of flat purchased in a co-operative society on or after December 10 1995, stamp duty is to be paid on market value as figured out by Stamp duty ready reckoner or on condition stated in the instrument whichever is higher. However documents lodged with the sub-registrar or superintendent of stamps prior to any amnesty scheme attract a lump sum reduced penalty.
Stamp papers are to be purchased in the name of either of the parties, ie, seller or buyer involved in the agreement, failing which will disable the stamp paper. It is said to be valid for 6 months from the date of purchase, only if the duty is paid on time.
Revenue stamp of Re.1 should be affixed for any property value exceeding Rs 5000. The legal agreement should contain data like Carpet or Built-up area, number of floors in the building, year of construction, name of the Division/Village and C.S/C.T.S number of plot of land for less time consuming process.
Stamp Duty is charged on the basis of built-up area or carpet area in sq mts of the premises that is mentioned in the document. Land rates are measured per sq.mts considering F.S.I to be 1, the stamp duty and registration department has now adopted a uniform method.
However stamp duty is similar to conveyance whereas for gift deed between family members, the amount is calculated according to article 25 pertaining to conveyance or 2 per cent of the market value, whichever is less and it is basically 0.5 per cent of the amount borrowed.
Stamp duty is mandatory to be paid in full and in good faith. It can only be altered by giving a misleading information that would cause trouble in future, when offended under the Stamp Act for hiding the true facts. However the surplus payment of stamp duty can be avoided as such there is no specific identification between super built-up area or saleable area.
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