Stamp Duty Guide for Property Transactions in Mumbai | Lecture notes Law

How do I find out the Stamp Duty Payable on my property?

You can find out the market value of your property and the stamp duty amount on it from the Ready Reckoner as

follows:-

You should know the division/village name and C.S. /C.T.S. number of your property.

From the Ready Reckoner, locate your valuation zone and sub-zone with the help of the division/village

name and C.S./C.T.S. number of your property.

From the table know your rate per square meter, then multiply the rate with the built up area of your

property in square meters. You will get a value. Reduce or increase this value for lift and depreciation as

per the valuation factors given in the Ready Reckoner and you will get a market value. Find out the stamp

duty amount applicable to you as per the market value.

The Department also does this procedure for you for a nominal fee.

1. The process of valuing the property and arriving at its market value and ascertaining the proper stamp duty is

called adjudication.

2. For adjudication, one can apply to the Collector of Stamps along with copy of the agreement containing the

details of the property.

3. The adjudication fee payable is Rs.100.

4. In case of a signed document, adjudication must be done within one month otherwise two percent interest per

month will be levied as penalty from the date of signature.

5. An adjudicated unsigned document is valid up to six months from the date of adjudication order up to December

31 of that year whichever is earlier.

Stamp Duty FAQ

What is stamp duty? Why should stamp duty be paid?

It is tax, similar to sales tax and income tax collected by the Government, and must be paid in full and on time. If

there is delay in payment, it attracts penalty. A stamp duty paid instrument/ document is considered a proper and

legal instrument/ document and such gets evidentiary value and is admitted as evidence in courts. Instruments

/documents not properly stamped are not admitted as evidence by the court.

What is the penalty for delayed payment?

If stamp duty is not paid on time, it attracts penalty at the rate of 2 % per month on the deficit amount of the stamp

duty. However maximum penalty can be only 200% of the deficit amount of the stamp duty. (This amendment has

come into force from 01-05-2001) Documents lodged with the sub-registrar/superintendent of stamps prior to any

amnesty scheme will attract a lump sum penalty of Rs.250 or Rs.300 only, as the case maybe.

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 04-07-1980?

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

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How do I find out the Stamp Duty Payable on my property? You can find out the market value of your property and the stamp duty amount on it from the Ready Reckoner as follows:-  You should know the division/village name and C.S. /C.T.S. number of your property.  From the Ready Reckoner, locate your valuation zone and sub-zone with the help of the division/village name and C.S./C.T.S. number of your property.  From the table know your rate per square meter, then multiply the rate with the built up area of your property in square meters. You will get a value. Reduce or increase this value for lift and depreciation as per the valuation factors given in the Ready Reckoner and you will get a market value. Find out the stamp duty amount applicable to you as per the market value. The Department also does this procedure for you for a nominal fee.

The process of valuing the property and arriving at its market value and ascertaining the proper stamp duty is called adjudication.
For adjudication, one can apply to the Collector of Stamps along with copy of the agreement containing the details of the property.
The adjudication fee payable is Rs.100.
In case of a signed document, adjudication must be done within one month otherwise two percent interest per month will be levied as penalty from the date of signature.
An adjudicated unsigned document is valid up to six months from the date of adjudication order up to December 31 of that year whichever is earlier.

Stamp Duty FAQ

What is stamp duty? Why should stamp duty be paid? It is tax, similar to sales tax and income tax collected by the Government, and must be paid in full and on time. If there is delay in payment, it attracts penalty. A stamp duty paid instrument/ document is considered a proper and legal instrument/ document and such gets evidentiary value and is admitted as evidence in courts. Instruments /documents not properly stamped are not admitted as evidence by the court. What is the penalty for delayed payment? If stamp duty is not paid on time, it attracts penalty at the rate of 2 % per month on the deficit amount of the stamp duty. However maximum penalty can be only 200% of the deficit amount of the stamp duty. (This amendment has come into force from 01-05-2001) Documents lodged with the sub-registrar/superintendent of stamps prior to any amnesty scheme will attract a lump sum penalty of Rs.250 or Rs.300 only, as the case maybe. 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 04-07-1980? 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 stamp paper be purchased? From 01/05/1994 stamp paper are to be purchased in the name of one of the parties to the instrument/ document. If the stamp paper is not in the name of the parties and if it is used for preparing the agreement, it will be as if no stamp paper was used. However it will not make the agreement invalid and can be enforced in law if proper stamp duty is paid subsequently. Prior to 01/05/1995 stamp paper could be purchased in any name and was valid for any period of time. However from 01/05/1994 stamp paper is valid for a period of six months from the date of purchase and after that it is treated as ordinary paper as if it has no stamp. In whose name should the Banker’s pay order be issued? It should be issued in favour of “Superintendent of Stamps, Mumbai” Is stamp duty payable on the instrument or on the transaction? 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). The addresses of the stamp office in Mumbai are as under – The Superintendent of Stamps General Stamp Office, Ground Floor,Town Hall Building, Shahid Bhagatsingh Road,Fort, Mumbai 400 023. Ph: 266 4589, 266 4585. Office of the Superintendent of Stamps First Floor, B.M.R.D.A. Building, Bandra (East), Mumbai 400 051. Ph: 645 1894. Stamp Office Town Hall, Collector's Office Compound, Thane (West) 400 601. (The Thane stamp office is open on Tuesdays and Fridays only and is closed on the 18th of each month for accounts purposes. If the 18th happens to be Tuesday or Friday, the office will be open on the next working day) Registration is the process of recording a copy of a document, transferring the title in immovable property to the office of the Registrar. Registration acts as proof that a transaction has taken place. The registration of a document serves as a notice of the transaction, to the persons affected by the transaction. Registration also serves as an implied notice to any person subsequently acquiring interest in the property, covered by the registered document. When a document, which is compulsorily to be registered, is not registered, it fails to confer any title given by the document.

for microfilming. After February 1, 2002 when the registration process was computerized, normally the documents have been returned within half an hour. Why does it take so long time for documents to be returned in old cases? The above mentioned procedure is one of the reasons but the major reasons due to which the document remained pending at the office of sub-registrar and not being indexed and not returned to the Owner are as follows:- · Stamp Duty was not paid according to the “Market Value”. · Income Tax Clearance certificate U/s 230 was not attached where required (See Note (i) below). · N.O.C. of Appropriate Authority in Form 37-1 was not attached where required. (See Note (ii) below). · N.O.C. under Urban Land Ceiling Act was not attached where required. · Certain parties to the Agreement had not admitted execution in front of the Sub-Registrar The above deficiencies were always pointed out at the time of registration by way of remark (such as MV, 230A, 37-1, NOC, ADM) on the registration receipt itself but due to ignorance, owners have never cared to clear them and hence documents which do not have deficiencies mentioned in the points mentioned above. However deficiency relating to non- admission is tolerated and the document is accepted and kept pending for admission only. Note: (i) Income tax clearance certificate under Section 230A of Income Tax Act, 1961is now not required from 01-06-2001 even for documents accepted for registration before 01-06- as requirement for such certificate was on the day of registration receipt itself but due to ignorance and a document was considered to be registered on the day it is Indexed and if it is not indexed uptil now no Income Tax Clearance certificate is required even for old cases. (ii) N.D.C. of Appropriate Authority in Form 37-1 is also not required from 01-07-2002. As above NOC is now obtainable this is applicable even for old cases STEP BY STEP PROCEDURE The registration procedure can be completed quickly if you have all the right documents What are the papers/requirements at the time of registration of documents? Please give full details. A document should be fully stamped as per the Stamp Duty Ready Reckoner so as to confirm that proper stamp duty has been paid. The Stamp Duty Ready Reckoner is a public document and is available for inspection at a sub- registrar’s office. For registering documents relating to property, one should go the respective registration office along with the original document and one photocopy. The document must be printed or typed on one side only and in black colour. A photocopy should be taken on only one side of the paper and the paper should be of 90 GSM thickness. There should be butter paper between the two sheets of the photocopy. Apart from a properly executed and fully stamped duty paid document which is to be registered, the following documents are also required before the registration procedure is started.  No Objection Certificate under the Urban Land Ceiling Act if the area of land transferred exceeds 500 sq. mts. in Mumbai City.  If the land belongs to a government or semi- government body or to a charitable trust the no objection certificate of such government or semi- government body or to a charitable trust  Property Card of the land on which the property is being registered is situated. This requirement is irrespective of whether land is sold or the building is being sold or any other part of the building is being sold and also irrespective of whether the seller of the property is recorded as the owner on the property card or not. In other words, even the flat owners are expected to produce this paper at the time of registration.  If property sold/purchased is in the old building and the benefit of depreciation is claimed on the market value, then any one of the following documents is to be produced as a proof of old construction: (a) Municipal assessment bill of the building OR

(b) Building Completion Certificate OR (c) Original registered agreement between the builder and original purchaser of that flat or of any other flat in that building (d) Original registered agreement between the builder and original purchaser of that flat or of any flat in that building. It is better to get the document adjudicated in case the building is very old and proper depreciation is not given by the sub-registrar. · Original Stamp Duty payment receipt · One should go along with along with two witnesses · Registration fees and computer service charges is to be paid in cash to sub-registrar at the time of registration How does one get the document registered at the sub-registrar’s office?

Bring the complete document along with other documents above.
Submit the document along with input form at the token window and get the token number.
Wait till the token number is announced.
On token number being announced, all parties to the document must present themselves before the sub-registrar to admit execution of the document, photographed, thumb impression and signature taken on additional sheet of paper in presence of sub-registrar.
Pay the required registration fees and computer service charges in cash as per the receipt (Computer service charges are @ Rs.20 per page)
The document will be returned within 30 minutes of getting the receipt
Please deal only with Officers and staff of the Registration Department who always display government identity card with Government Seal. If any person who has executed the document is unable to come to sub- registrar’s office on medical grounds, then what should he do? In case a person is unable to attend the office of the sub-registrar on medical grounds, then he should apply to the sub-registrar through a duly authorized representative stating the fact. The sub-registrar is bound to visit such person after office hours i.e. morning 9.00 a.m. to 10.00 a.m. and in the evening 5.00pm to 6.00 pm. That person shall admit in execution in presence of that sub- registrar, affix his photograph and sign and put his thumb impression on the document. The sub-registrar will take the document with him and complete all the formalities and process of registration. The offices of Sub-Registrar of Assurance in Greater Bombay are located at the following places –
Sub-Registrar of Assurances, Old Customs House, Ground Floor, Shahid Bhagat Singh Marg, Ph: 266 2853 Timings: 10 : 00 a.m. to 4 :30 p.m. Lunch: 1 : 00 to 1 : 30 p.m. 2nd and 4th Saturdays and Sundays closed.
Sub-Registrar of Assurances, Griha Nirman Bhavan, Ground Floor, Bandra (E), Mumbai 400 051. Ph:642 2161 Timings: 10 : 00 a.m. to 4 : 30 p.m. Lunch: 1 : 00 a.m. to 1 : 30 p.m. 2nd and 4th Saturdays and Sundays closed.
Sub-Registrar of Assurance, Town Hall, Collector's Office Compound, Thane (West).

Stamp Duty Guide for Property Transactions in Mumbai, Lecture notes of Law

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Stamp Duty FAQ