Stamp Duty & Registration Procedures

(1) STAMP DUTY

(i) Stamp Duty for Flats

(ii) Stamp Duty for Shops/Galas/Office Premises & Garage

(iii) Procedure for Stamp Duty

Compulsory Registration of Documents Section 17 of the Registration Act, 1908

(i) Registration Procedure

(ii) On Completion of Procedure

(iii) Registration Fee

(iv) Person’s entitled to present the document to the registering office

(v) Consequences of non-registration of instruments

(vi) Time

(vii) Expiry of the prescribed time

Deed of Cancellation, Deed of Rectification

The Procedure on Admitting a Document to Registrations, Unclaimed Documents, Execution of documents outside India

Power of Attorney

(i) General Power of Attorney

(ii) Special Power of Attorney

(iii) Necessity of a Power of Attorney

(iv) Execution of a Power of Attorney

(v) Attestation of a Power of Attorney

(vi) Persons who are exempted from being present at the registering office

2) STAMP DUTY

Stamp duty is a pre-requisite condition, which has to be paid before taking possession of the flat. It is essential to pay the requisite stamp duty every time one purchases a new flat or even when it is transferred within the family.

(i) Stamp Duty for Flats

Present rates of stamp duty for residential premises in the city of Mumbai above Rs.5,00,000/- is Rs.8750/- plus 5%

(ii) Stamp Duty for Shops/ Galas/ Office Premises & Garage

The rate of Stamp Duty for Shops/Galas/Office Premises and Garage even if used for car parking is 5% in Mumbai.

If the authorities are demanding more stamp duty than the agreement value then a representation should be made to the authorities emphasizing the below mentioned points (as applicable)

• Possession of the premises will be acquired at a later date. (10% reduction in the market value is normally given by the town planners if possession is not given to the purchaser at the time of execution of the agreement).

• The duty has to be paid on Sq. Meter’s built up area and not on super built up area.

• If payments have been made in 1995 and the agreement has been executed in 1998 then the market value of the year 1995 has to be taken as per the Principles of Land Acquisition Act.

• There is a reduction in the market value if the size of the shop is big.

• The area is lacking in infrastructural facilities.

• There is a defect in the title of the property and therefore, market value will also be reduced.

• The officer should be told to inspect the premises and only then the market value should be fixed.

(iii) Procedure for Stamp Duty

When the Flat-Purchaser desires of entering into an Agreement, he/she is given the stamp duty amount which is calculated as per the Agreement Value or Market Value whichever is higher. Once the stamp duty amount is given to the Flat-Purchasers they are told to get the Pay-Order, which will be addressed in favor of “SUPERINTENDENT OF STAMPS, MUMBAI”. The pay-order is given for franking of the agreement and later on the said agreement is duly filled and signed by the respective parties.

Compulsory Registration Of Documents: Section 17 of the Registration Act, 1908, This Act lays down different categories of documents for which registration is compulsory.

The documents relating to the following transactions of immovable properties are required to be compulsorily registered:

Under Section 2(6) of the Registration Act, 1908 the term “immovable property” includes: “land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to anything which is attached to the earth, but not standing timber, growing crops nor grass.”

• Instruments of gift of immovable property.

• Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent.

• Instruments which create or extinguish any right or title to or in an immovable property of a value of more than one hundred rupees.

Place for presenting document for registration Section 28 of the Registration Act, 1908 States that all documents of which registration is compulsory if it relates to an immovable property as well as a few documents of which registration is optional should normally be presented for registration in the office of the Sub-Registrar within whose sub-district the whole or some portion of the property to which the document relates is situated.

(3) Registration Procedure

At the time of lodging a document for registration of any instrument, the original document should be printed on one side only along with two photocopies of the original have to be submitted to the Registering Officer. The copies are to be photocopied only on one side of the paper and there has to be a butter paper between the two photocopied papers. The registration procedure also requires the presence of two witnesses and the payment of the appropriate registration fees.

(4) On completion of Procedure

A receipt bearing a distinct serial number is issued. The following requirements for completing the registration are usually stated on the receipt:

• Market Value of the property;

• Income-tax clearance; i.e., N.O.C. under Section 269 UL (3) issued by the Appropriate Authority constituted under Chapter XX-C of the Income Tax Act, 1961 if the same is applicable;

• Urban Land Ceiling declarations of the transferor/s and the transferee/s. Fees for registration of a document The State Government has been empowered to fix the fees for registration of the document.

5) Registration Fee

The registration fee at present fixed for registering documents relating to property transactions is approximately 1% of the market value or agreement value whichever is higher subject to Maximum of Rs.30,000/- [from 1-4-2003]. The registration fee for the following immovable property transactions is liable on the market value of property on which stamp duty is charged:

• Conveyance

• Exchange

• Gift

• Partition

• Transfer of Lease by the way of Assignment

• Sale

• Power of Attorney given for consideration

• Authorization to the attorney to sell the property