Wednesday, April 3, 2013

When Stamp Duty is Payable And Who is Liable To Pay..

When is the stamp duty payable?

It is payable before execution of the document 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 person’s party to the document.

Who is liable to pay?

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

Is stamp duty payable on all instruments/ documents 

relating to the transfer of immovable property?

Except transfer by will (or by original nomination in a cooperative 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.

It is clarified that a when a nominee transfers the flat subsequently in the name of the legal heirs, that transfer instrument is to be 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 duty on market value was introduced from 04-07-1980 will be charged on agreement value only.

What is the relevance of the dates 10-12-1985 and 


For any flat purchased in a co operative housing society on or after 10-12-1985, it is required to pay 
stamp duty on market value at the time of signing the agreement itself. However, prior to 10-12-1985, such transactions of agreement for sale required a stamp paper of Rs.5 only at the time of signing the agreement. However stamp duty on market value will have to paid on all such transactions at the time of conveyance of the property in favour of the society. From 04-07—1980 onwards, if the property is not covered under the Co-operative Society Act, you are required to pay stamp duty on market value. This payment is required at the time of execution of the document. However, prior to 04-07-1980 there was no market value concept hence agreement value was accepted for stamp duty payment.

In whose name should the Banker’s pay order be 


It should be issued in favour of “Superintendent of Stamps, Mumbai”

Is stamp duty payable on the instrument or on the 


It is payable on instruments and not on transactions. Stamp 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.

What are the instruments on which it is 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 India Stamp Act).

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