The information on this page addresses the most common queries and concerns of buyers with regard to stamp duty levied on property transactions in India.
The price that a property can command in the open market is known as its market value. Stamp duty is based on the market value or the agreement value of the property, whichever is greater.
When a piece of property is given or ‘leased’ to an individual (known as the ‘Lessee’) for a stipulated period of time, by the owner of the property (known as the ‘Lessor’), the property is referred to as Leasehold Property. A certain amount is fixed by the Lessor to be paid as lease premium and annual lease. The land ownership rights remain with the Lessor. Transfer of property requires prior permission.
When ownership rights for a piece of property are given to the purchaser for a price that property is referred to as Freehold Property. Unlike in the case of leasehold property, no annual lease charges need to be paid and the freehold property can be registered and / or transferred in part(s).
An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. Usually, the entire amount is paid at the time of handing over possession.
The area of an apartment or building, not inclusive of the area of the walls is known as carpet area. This is the area that is actually used and in which a carpet can be laid. When the area of the walls including the balcony is calculated along with the carpet area, it is known as built-up area. The built-up area along with the area under common spaces like lobby, lifts, stairs, garden and swimming pool is called super built-up area.
Legally, the actual area owned by the individual is the basis for calculation of maintenance charge.
Yes, an agreement for sale of a flat / shop / office is required to be stamped and registered as per applicable law.
Once adequate stamp duty is affixed on an instrument and it is dated, signed by the parties and attested (where required) by witnesses, it can be lodged for registration after payment of the registration fee. All parties signing the instrument are required to attend the office of the concerned Sub Registrar of Assurances either in person or through their constituted attorney to admit execution of the instrument. If the signatory to the instrument is different than the person present for registration, the power of attorney in such case will require registration. A copy of the PAN Card is essential for registration.
After lodging an instrument it is registered and the seal of the Sub Registrar is affixed on the instrument, thereafter the original instrument is returned back to the parties.
A stamped document should be executed within six months from the date of stamping.
Yes, if stamp duty is paid on an instrument but the instrument is not signed by any party then an application is to be made to the concerned authorities for refund of stamp duty within six months from the date of stamping. On receipt of such application, the concerned authorities are empowered to refund the value of stamp duty after deducting such amounts as may prescribed.
A person can seek the opinion of the Collector of Stamps by making an application to him for adjudication of stamp duty payable by such person on the instrument. For this purpose, the person has to submit the instrument and other evidences as required, along with the prescribed fee. The Collector’s opinion is final and conclusive.
The parties can themselves decide who shall pay the stamp duty. If nothing is mentioned in the agreement then as per Section 30 of the Bombay Stamp Act, if the transaction relates to resale of flats, the stamp duty will have to be paid by the purchaser.
Yes, as per the provisions of Bombay Stamp Act, Stamp Duty will have to be paid on a deed of Family Settlement.
Market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the market value whichever is higher.
Various Banks and Financial Institutions have been authorised with a stamping / franking facility at some of their branches. Stamp duty can be paid by a pay order / demand draft drawn in favour of the concerned Bank / Financial Institution. The pay order / demand draft is to be accompanied with a covering letter from the issuing bank that the same is for payment of Stamp Duty. A receipt is issued by the concerned Bank / Financial Institution for the stamp duty amount.
The instruments like Agreement to sell, Conveyance Deed, Exchange of Property, Gift Deed, Partition Deed, Power of Attorney, Settlement and Deed and Transfer of Lease attract Stamp Duty on market value of the property.
All instruments are liable to be stamped before or at the time of execution of instrument when executed in the State of Karnataka.