WHAT IS STAMP DUTY?
As per the provisions of the Bombay Stamp Act 1958 and its subsequent clarifications and guidelines, it is mandatory for a purchaser/ seller to register the document of any real estate transactions i.e. Agreement of Sale, Conveyance, Power of Attorney etc. by paying adequate Stamp Duty to the Government.
WHAT IS THE BASIS FOR CHARGING STAMP DUTY & REGISTRATION CHARGES?
The working of Stamp Duty and Registration Charges are based on the following factors:
1) The Stamp Duty is charges and payable on Market Value as per the Rate prescribed in the ready Reckoner published by the govt. from time to time or as per Agreement Value whichever is higher.
2) The amount of Stamp Duty is exclusive of registration fees.
3) for Commercial & Industrial premises i.e. Shop/ Industrial unit/ Basement, the rates of Stamp Duty is 5% (Five percent) of the Market Value or Agreement Value, whichever is higher.
4)The Registration Fees is 1% (One percent) of the Market Value or Agreement Value, whichever is higher, subject to Maximum of Rs. 30,000/- w.e.f. 01/04/2003.
HOW IS THE FAIR MARKET VALUE RATES DETERMINED FOR THE PURPOSE OF STAMP DUTY?
The rates of fair Market Value for Greater Mumbai are published by the office of Dy. Inspector General of registration and Dy. Collector of Stamps, Mumbai, at the end of each year, applicable for the next year following month of January there from and are valid for a period of One Year. The list of zone wise market value together with zonal plans are available/ displayed in the office of Sub-Registrar of Assurances, for the information of Public.
WHICH DOCUMENTS/ INSTUMENTS ATTRACT STAMP DUTY?
- Agreement to Sell
- Deed of Conveyance & Deed of Assignment
- Lease Deed
- Deed of Exchange
- Mortgage Deed
- Deed of Partition
- Power of Attorney (with or without consideration)
- Gift Deed
- Transfer of property by Court Order/ Decree
- Agreement of Leave and License
- Agreement of Tenancy for residential & Commercial Premises
- Development Agreement
- All Transfer Documents.
WHERE STAMP DUTY IS NOT APPLCABLE
The following Document are exempted from the payment of Stamp Duty:
a) Any Document by which the rights are transferred by WILL.
b) Transfer of rights by Nomination in registered Co.Op Housing Societies.
c) Bill of Exchange, Letter of Credit, Cheque, Promissory Note, Insurance Policy, Transfer of Shares & Debentures.
WHAT IS READY RECKONER?
Ready Reckoner of Stamp Duty is compiled at the end of each year, for applicability from month of January of next year, for payment of Stamp Duty under Article 25(d) of Schedule I of the Bombay Stamp Act 1958 relating to residential premises in Mumbai, in a Co-Operative Housing Society registered under the Maharashtra Co-Operative Society Act, 1960 or to which provisions of the Maharashtra Ownership Flats (Regulation of Promotion of Constructions, Sale, management and Transfer Act, 1963, or the provisions of the Maharashtra Apartment Ownership Act, 1970, whichever is applicable. Note: The Stamp Duty is identical irrespective of residential and non-residential premises.
WHAT IS THE PECENTAGE OF STAMP DUTY FOR DIFFERENT USERS?
The Stamp Duty is 5% (Five Percent) of the fair market value of the property determined by the Stamp Duty Office, based on the rates decided and published by the State Government from time to time.
Note: W.E.F. 25th April 2012 the Stamp Duty is 5% of the fair Market Value of Agreement Value. For Land, Flat, Shop, Office and Industrial Unit etc. the Stamp Duty payable under Article 25(b) of Schedule 1 of the Bombay Stamp Act, 1958.
- Stamp Duty is payable on Market Value or Agreement Value, whichever is higher.
- The 5% charges does not include Registration Fees which is 1% of the market value or agreement value whichever is higher subject maximum of Rs. 30,000/- (effective from 1st April 2003.
- Stamp Duty is charges for every Rupees 500 or part thereof of the market value, for all practical purposes. If on a document, total Stamp Duty chargeable is more than Rs. 100 then is the last two digit of amount is Rs.50/- or more then stamp duty amount is rounded off to next Rs. 100/- and in case the last two digits of the stamp duty amount is Rs.49/- or less then stamp duty amount is to be rounded off to previous Rs.100/-.
- Registration charges are charged for every Rs.1000/- or part thereof of the market value.
- Stamp Duty must be paid at the time of execution of the agreement. Penalty for late payment of stamp duty is 2% per month on deficit stamp duty amount, subject to maximum 4 times of the deficit stamp duty amount.
- Stamp Duty on Agreement for Sale prior to 10-12-1985 is Rs. 5/- only.
STAMP DUTY RATES FOR LEAVE AND LICENSE AGREEMENT
(In the state of Maharashtra as per Article 36A 9a) of the Schedule I of the Bombay Stamp Act, 1958 w.e.f. 01-05-2013 is 0.25% of total sum.
Total Sum*: Total Sum means the total of all license fees or rent payable for full duration of license period (maximum 60 months) including renewable period + amount of non-refundable deposit or advance or premium + interest calculated @10% per annum on refundable security deposit.
Example: If a premises is let out for a period of 2 years for Rs. 20,000/- per month and a non-refundable premium of say Rs.10,000/- and a refundable deposit of Rs. 1,00,000/- then
Total sum will be = (Rs.20,000/- X 24) + (Rs.10000/-) + (Rs.1,00,000/-X0.10X2)
= (480,000/-) + (10,000/-) + (20,000)
= Rs. 5,10,000/-
Stamp Duty will be = Rs. 5,10,000/- X0.25% = Rs.1275/- Rounded off to Rs.1,300/- (As per amended section 70)
Note; If the Licensee does not vacate the premises, one should apply to Competent Authority under the Maharashtra Rent Control Act, 1999, having office at MHADA Building, Bandra (East0, Mumbai 400051.
Registration fees on Leave and License Agreement is Rs. 1,000/-
HOW IS STAMP DUTY FOR RESIDENTIAL PREMISES FLATS/ HOUSE CHARGED?
Residential premises mean any premises used occupied for the living purpose such as house, bungalow, dwelling unit, flat etc. either under construction or ready for occupation. It is observed that the Stamp Duty for residential Premises works out to less than 10% of the fair market value.
HOW IS STAMP DUTY FOR COMMERCIAL PREMISES CHARGED?
Generally Commercial Premises are: (a) Offices, (b) Shops, (c) Places of Trading & Mercantile etc. or such other premises on non-residential use. The Stamp Duty for such Commercial Premises is straightaway 5% (five percent) of the fair Market value Rates as published by the Government without any concession or relief whatsoever.
HOW IS STAMP DUTY ON INDUSTRIAL PREMISES CHARGED?
Factory units, galas, in Industrial Estate, godowns and storage units where manufacturing or storage activities are permitted or premises are to be used for the said purpose are covered under this category. The Stamp Duty is 5% (Five percent) straightaway of the fair Market Value as decided by the Government applicable to the respective local zone, without any relief.
VALUATION OF PROPERTY FOR STAMP DUTY PURPOSES
Generally the purchaser / seller pays 5% (Five percent) Stamp Duty on the value incorporated in the document of transactions and lodges the document for Registration, which some time might be less than the fair market value; resulting in loss of Revenue to the Government. The State Government has created separate cell for valuation of Property for the payment of Stamp Duty. The Officer of valuation cell is known as Town Planner (Stamp Duty & Valuation) who is empowered under Section 32 (a) of the Bombay Stamp Act, 1958 to evaluate and determine the fair market value of the Registered Documents. If the Officer feels that the transaction is undervalued and thereby the party has paid less Stamp Duty, he can issue cause notice to the Purchaser, informing the under the under valuation and call upon the party to pay the difference between the Stamp Duty payable as per the fair Market Value decided and the actual Stamp Duty paid. Such difference is recovered by charging penalty at the rate of 2% per month from the date of Registration/ Execution of Documents. To avoid unnecessary harassment, it is advisable to get the documents adjudicated from the concerned adjudicating authority appointed by the State Government.
WHAT IS ADJUDICATION OF DOCUMENT?
or the convenience of the public, the state Government has appointed an Adjudicating Authority. The party concerned can get advance information of valuation and payment of adequate Stamp Duty before execution of the document, by getting their documents adjudicated from the Collector of Stamps who determine the Stamp Duty payment which will be payable at the time of execution of the instrument.
HOW IS THE PROCESS OF ADJUDICATION DONE?
The process of adjudication is done as follows:
1. The party concerned can make such application to the collector of Stamps along with the Original and 2 Xerox copies of unsigned documents, Form No II in the form of AFFIDAVIT duly notarized and adjudication fees of Rs.100/-. The Collector of Stamps works out Stamp Duty and returns the document with due endorsement.
2. The validity of unsigned adjudicated document is up to 31st December of that respective year only, within which the document should be registered with payment of adequate Stamp Duty.
3. In the event of the document signed before adjudication, it must be adjudicated within ONE month, from the date of signing the documents; otherwise it will attract 2% interest per month by way of penalty.
WHO ARE THE ADJUDICATING AUTHORITIES?
The documents can be adjudicated by Collector of Stamps for each district as appointed by the Revenue Department. In Mumbai there are following 5 collectors who determine/ Adjudicate the payment of stamp duty payable on the documents submitted to them.
- Collector of Stamps, Mumbai City.
Old Custom House, 3rd floor, Shahid Bhagat Singh Marg, Mumbai 400023
(The jurisdiction is entire South Mumbai).
- Collector of Stamps (Enforcement II.
General Stamp Office, Town Hall Building, Ground floor, Shahid Bhagat Singh Road, Mumbai 400023.
(The jurisdiction is entire Greater Mumbai for documents which are executed but the parties have not paid the same can be complained here to get the same valued and paid.)
- Collector of Stamps – Borivali Taluka.
1st floor, MMRDA Building, Bandra Kurla Complex, Bandra (East0, Mumbai 400051.
(Jurisdiction is from Goregaon to Dahisar)
- Collector of Stamps – Andheri Taluka.
1st floor, MMRDA Building, Bandra Kurla Complex, Bandra (East0, Mumbai 400051.
(Jurisdiction is from Bandra to Jogeshwari).
- Collector of Stamps – Kurla Taluka.
Administrative Building, Near Fly Over Bridge,, Chembur Mumbai 400071.
(Jurisdiction is from Kurla to Chembeur and Dadar to Mulund)
WHERE STAMPD DUTY CAN BE PAID?
For the convenience of the public, many Banks are authorized to accept the Stamp Duty Payment and franking of the Documents is done at various center throughout Greater Mumbai.
ARE ANY REBATES IN PAYMENT OF STAMP DUTY PERMISSIBLE FOR OLD BUILDINGS?
As per the provisions of Stamp Act, a party is entitled for rebate/ depreciation in payment of Stamp Duty for OLD premises constructed within the last 5 years are not entitled for any rebate or concessions whatsoever. Following table will show the rebate (depreciation).
|Completed Age of Building in Years||RCC Structure||Half or Semi Pucca Structure|
|0-2 years||No Depreciation||No Depreciation|
|Above 2 & up to 5 years||5%.||5%|
|Above 5 years & up to 10 years||10%||15%|
|Above 10 years & up to 20 years||20%||25%|
|Above 20 years & up to 30 years||30%||40%|
|Above 30 years & up to 40 years||40%||55%|
|Above 40 years & up to 50 years||50%||70%|
|Above 50 years & up to 60 years||40%||80%|
|Above 60 years||30%||85%|
Note: Generally, the Registrar doesn’t allow more than 50% depreciation.
WHAT IS THE AREA OF PREMISES CONSIDERED FOR STAMP DUTY CALCUALTED?
The Stamp Duty is payable on the net BUILT-UP AREA only, and not on Carpet Area or Super Built-Up Area. When only Carpet Area or Super Built-Up Area is mentioned in the Agreement, built up area for Stamp Duty is calculated as per following method:
As per the provisions of the Bombay Stamp Act, 1958 and its subsequent clarifications and guidelines, it is mandatory for a purchasers/ seller to register the document of any real estate transactions i.e. Agreement of Sale, Conveyance, Power of Attorney etc. by paying Stamp Duty to the Government.
In any case any owner has not paid Stamp Duty on his Documents, the following procedure is to be followed for payment of Stamp Duty:
1. First of all the following information is to be kept ready:
a) Area of the Flat
b) CTS Number
c) Revenue Village
d) Year of the construction of the building
e) Floor on which the property is situated
f) Building having Lift or without Lift.
2. If the Agreement is old, then the Original Agreement is to be located. From the original agreement, the above stated particulars are to be confirmed. Further, it should be ascertained from the Agreement, whether any Stamp Duty has been paid.
3. Next, prepare an Affidavit regarding the date of execution of Agreement, area of the flat, the number of stories in the building, full depreciation of the property, consideration amount paid.
4. Then fill-up the requisite Application form containing all the above particulars. Further, Application should carry certified Documents of the following:
a) Original Agreement
b) Certified true Copy of the Agreement
c) Original Society Letter
d) Certified true copy of Assessment Bill
e) Certified copy of the Property Card.
f) Certified copy of the Occupation Certificate
g) Any evidence of having taken possession of the Property
h) Proof of payment
5. After the Application form is completed in all respects as stated above, the Application form is to be submitted to the Collector of Stamps of the respective area for adjudication of the Stamp Duty.
6. One month after submission of Application to the collector of stamps, follow up with the Department for receipt of Demand Notice of Stamp Duty.
7. On receiving the Demand Notice from the Collector of Stamps, the payment of the amount stated in the Demand Notice should be paid to the collector of Stamps.
8. After one week, collect Receipt for payment of Stamp Duty and Original Documents duly certified by the Authorities.
Dates with Stamp Duty & Registration
|February 16, 1959||Bombay Stamp Act, 1958 comes into force (Now Maharashtra Stamp Act)|
|July 4th, 1980||Concept of market Value introduced for stamp duty on conveyance.|
|January 1st, 1984||Maharashtra Registration fees was fixed at Rs.5000/- or 1% of Market Value whichever is less. Prior to this registration fees was 1% of Market Value with no upper limit.|
|December 10, 1985||‘Agreement for Sale’ deemed to be conveyance for the purpose of charging stamp duty.|
|December 10, 1985||Benefit of Stamp Duty as per Article 25 (d) made applicable from this date up to March 16th 1988 (Vide Notification dated 11-05-1994) as Article 25 (d) was introduced on March 17th 1988. Earlier Stamp Duty was 10%, 12% and 15% depending on the value.|
|March 17, 1988||Article (d) introduced reducing Stamp Duty for residential properties.|
|December 10, 1985||Stamp Paper is valid for a period of six months only.|
|February 7th, 1990||Development Agreement is subject to 1% Stamp Duty, which was earlier 1%.|
|March 1st, 1990||Stamp Duty Ready Reckoner was brought out for the first time for the purpose of Market value for charging Stamp Duty. Earlier this work was being done by the Town Planning and Valuation Department.|
|April 1st, 1994||FIRST STAMP DUTY AMNESTY SCHEME, for instrument executed after 04/07/1980, was announced which was operative up to 30-06-1995. Penalty was Rs.250/-|
|May 1sr, 1994||Stamp Paper to be purchased in the name of name of one of the parties signing the document.|
|May 19, 1995||Franking of document was started at General Stamp Office, Mumbai.|
|July 28, 1995||Bombay city was re-named as Mumbai.|
|August 14, 1995||The Bombay Stamp (Determination of True Market Value of Property) Rules, 1995 comes into force.|
|September 1st, 1995||Maximum registration fees was increased to Rs.10,000/-|
|October 1st, 1995||Practice of sending documents to Pune was discontinued and documents were given back within 2 weeks.|
|September 15, 1996||Adjudication fees was revised to Rs.50/ from earlier maximum Rs.25/-|
|April 1st, 1995||Maximum Registration fees was increased to Rs.20,000/-|
|July 5th , 1997||SECOND STAMP DUTY AMNESTY SCHEME announced, which was operative up to 31-03-1998. Penalty was Rs. 250/-|
|February 7th, 1998||Stamp Duty Ready Reckoner in English was first published by the Architects Publishing Corporation of India.|
|November 26, 1998||THIRD STAMP DUTY AMNESTY SCHEME announced, which was operative up to 31-03-1999. Penalty was Rs.300/-|
|March, 31, 2000||Registration made compulsory for Leave and License and Tenancy Agreements. Premium of (Pugree) on tenanted premises was legalized.|
|January1st, 2001||Penalty reduced to maximum 2 times of deficient Stamp Duty. Earlier Penalty was up to 10 times.|
|May 1st, 2001||Adjudication fees was revised to Rs.100/- from earlier Rs.50/-|
|June 1st, 2001||Requirement of obtaining Income Tax clearance certificate under Section 230 A of Income Tax Act was waived off.|
|September, 25 2001||The Registration Act, 1908 was amended, withdrawing authority & powers of Sub-Registrars of Delhi, Kolkata, Chennai & Mumbai to register documents relating to property situated anywhere in India. The amendment was made applicable to state of Maharashtra through executive order with effect from 01-01-2002.|
|January 1st, 2002||Affixing of photograph & thumb impression made compulsory for registration of documents relating to property.|
|February 1st, 2002||Registration of documents were computerized in Mumbai and some other cities.|
|April 1st, 2002||Capital Gains Tax on sale of Immovable properties is to be calculated on the basis of Market Value as arrived by Stamp Valuation Authority as per Stamp Duty Ready Reckoner.|
|May 1st, 2002||Stamp Duty reduced to 2% for gifts to relatives.|
|July 1st, 2002||Requirement of obtaining No Objection Certificate under Chapter XXC of Income Tax Act was waived off.|
|August 2nd 2002||A Landmark judgment on Stamp Duty was delivered regarding market value of property sold under government control.|
|January 20, 2003||For registration a copy of commencement certificate, occupation certificate or completion certificate was made compulsory. However building constructed prior to 25-03-1991 is exempted from this provision.|
|April 1st, 2003||India’s first Stamp Duty & Registration Help-Line on telephone was started in Mumbai|
|April 1st, 2003||Maximum Registration fees was increased to Rs.30,000/-|
|May 1st, 2003||Rate of Stamp Duty between rs.10 Lakhs to 15 Lakhs reduced from 8% to 6%.|
|October 15, 2003||Registration fees is payable by way of Government Challan, Bank Draft or Pay Order.|
|January 26, 2004||FOURTH STAMP DUTY AMNESTY SCHEME announced, which was operative up to 31-10-2004. Penalty was Rs.1000/- OR 1% OF DEFICIT Stamp Duty amount, whichever was more.|
|July 1st, 2004||Stamp Duty reduced to maximum 5 percent.|
|July 26, 2005||Flooding caused by heavy rains destroyed many documents kept on ground floor and basement of buildings in Mumbai.|
|May 1st, 2006||Stamp Duty reduced to Rs.7600/- from Rs.8750/- on value of Rs. 5 Lakhs.|
|June 20, 2006||VAT is applicable @5% of the state value, less cost of land & labor charges, up to 31-03-2010|
|June 6th, 2007||Photographs, Identity Proof and Thumb Impression of witness during registration of document made mandatory by order of G.I.R.|
|December 6th, 2007||Urban Land (Ceiling & Regulation) Act, 1976 repealed.|
|February 25, 2008||The District Deputy Registrar of Co-Operative Societies appointed as competent authority for deemed conveyance.|
|May 12th, 2008||Sale of flat on Carpet Area basis made mandatory.|
|June 5th, 2008||Investor Friendly Stamp Duty amended and now applicable if Flat is sold, within one year, which was earlier three years.|
|June 5th, 2008||Stamp Duty on ‘Development Agreement’ shall be 5% as per conveyance, which was 1% earlier.|
|June 9th, 2008||FIFTH STAMP DUTY AMNESTY SCHEME announced. After 2 extensions effective up to 30/11/2008 and a break between 01/12/2008 to 01/03/2009. It was further extended on 02/03/2009 up to 31/03/2009. . Penalty Rs.500/- or Rs.1000/-as applicable.|
|August 11, 2008||E-Stamping started at Pune.|
|February 16, 2009||Upper limit for Registration of Rs.30,000/- was removed and registration fees was made directly 1% of the market value without any upper limit, but by a notification dated 01/03/2009 the earlier notification dated 16/02/2009 was stayed temporarily till further orders.|
|April 1st, 2010||VAT on sale of flat reduced to 1% but now on full value.|
|August 26, 2010||R was adopted as official symbol of Indian Currency – Rupee, by Government of India.|
|August 31, 2010||Builders have no right to sell Parking under Stilt and on open land, held Supreme Court.|
|October 13, 2010||Rules notified for deemed conveyance.|
|October 24, 2011||0.33% additional F.S.I. available on payment of premium for Mumbai Suburban District.|
|April 25, 2012||Stamp Duty @ 5% of Market Value on all properties in Municipal Corporation – Article 25 (d) pertaining to slab wise stamp duty rate is deleted.|
|September 6th, 2012||Office bearers of a Co.Op Housing Society need not sign and bond.|
|October 20, 2012||Office Timings of few Sub-Registrar’s office in Mumbai Suburban changed to 7:00 a.m. to 2:00 pm & 2:00 pm to 9:00 pm.|
|December 5th, 2012||Both side typed/printed document accepted for registration.|
|May 1st, 2013||Stamp Duty on Leave and License rationalized all over Maharashtra.|
|June 1st, 2013||Buyer of immovable property must deduct T.D.S. under Income Tax Act, 1961@1% of Agreement Value, if the Agreement Value is Rs.50 Lakhs or more.|
|February 12, 2014||E-Registration of ‘Leave and License’ started.|
|March 1st, 2014||Both side typed / printed documents made compulsory for registration.|
|July 10, 2014||E-registration for Sale Document of large projects started.|
|August 1st, 2014||Thane District bifurcated into Thane and Palghar Districts.|
|April 24, 2015||Penalty for late payment of Stamp Duty is increased to maximum 4 times of the deficient Stamp Duty. Earlier the penalty was maximum up to 2 times.|
|April 24, 2015||For residential and agricultural property gifted to husband, wife, son, daughter, or wife of a deceased son, the amount of Stamp Duty is fixed at Rs.200/-|
|November 4th, 2015||For arriving at Market Value of old premises the value of land portion is not entitles for depreciation.|
|December 4th, 2015||Additional F.S.I. of .50% in Mumbai Suburban District shall be allowed by paying premium at the rate of 60% of the Land value as per the prevailing Stamp Duty Ready Reckoner rate. Earlier only .33% F.S.I. was allowed, however premium was charged as per the Market Value rate of Land given in the Stamp Duty Ready Reckoner for the year 2008.|
|April 1st, 2016||Ready Reckoner will now be issued on 31st March every year and shall be applicable from coming 1st April for the financial Year. Earlier Ready Reckoner was issued on 31st December every year and was applicable for coming calendar year.|
|May 1st, 2016||Real Estate (Regulation and Development) Act comes into force.|
|November 8th, 2016||Notes of Rs.1000/- and Rs.500/- of old series withdrawn from circulation (Demonetized)|
|April 1st, 2017||Any property sold on or after this date is eligible for valuation as on 01/04/2001, if that property was acquired prior to 31/03/2001, for the purpose of calculating capital gains tax. Earlier this date was 01/04/1981.|