Wednesday, 18 December 2013

ABNORMAI UPWARD REVISION OF STAMP DUTY FOR AGREEMENTS TO SELL IN KARNATAKA


Recently, the Government of Karnataka has imposed stamp duty on agreements to sell at 0.25 [point two five] percent. The revised rates are effective from 1st April, 2009. Thus, with this revision, the stamp duty payable for an agreement to sell of the value of the property of Rs. 50,00,000/- would be Rs.12,500/- whereas before this revision the optimum stamp duty payable was only Rs. 200/-.
The present rate of stamp duty would heavily burden the purchasers of properties which is considered to be abnormal and unfair when compared to the stamp duty levied for such instruments in the neighboring States. In the State of Tamil Nadu, the stamp duty payable on agreement to sell in only Rs.0/-irrespective of the amount of sale consideration. Therefore, the Government of Karnataka may reconsider this matter keeping in mind the suffering encountered by the purchasers on account of global economic recession and revert back to the pre-revised pattern of levy of stamp duty on slab system with optimum levy of Rs.200/-


Art. 5(e)- If the Agreement or Memorandum of an Agreement relating to sale of immovable property where in part performance of the contract and possession of the property is not delivered stamp duty payable will be at 0.25 [point two five] rupees for every one hundred rupees or part thereof on the market value equal to the amount of consideration.


Art. 5(t) – If the Agreement or Memorandum of an Agreement is relating to construction or development or sale of immovable property including a multi unit house or building or unit of apartment or flat etc., by a person having a stipulation that after construction or development, such property shall be held jointly or severally by the person and the owner or lessee, as the case may be, of such property, or that it shall be sold jointly or severally by them or that a part of it shall be held jointly or severally by them and the remaining portion part thereof shall be sold jointly or severally by them, the stamp duty payable in such cases will be at One rupee for every one hundred rupees or part thereof on the market value of the property or the estimated cost of construction or proposed construction or development or proposed development of property as the case may be, or on the consideration for such transfer whichever is higher, provided that if proper stamp duty is paid on a power of attorney executed between the same parties in respect of the same property under Article 41(e), (ea) and (eb), then stamp duty under this article shall be rupees two hundred.

Art. 11 – In respect of any decision in writing by an arbitrator or umpire, not being an award directing a partition, on a reference made otherwise than by an order of the Court in the course of a suit, the stamp duty payable shall be as are levied for a deed of conveyance under article 20 (1) on the amount or market value of the property which is the subject matter of award, whichever is higher.

Art. 20 In respect of deed of conveyance, the stamp duty payable will be 6 percent instead of 7 percent. In addition to this, the purchaser shall have to pay surcharge and ccss on the amount of stamp duty.

Art.22 In respect of counterpart or duplicate of any instruments, chargeable with duty and in respect of which the proper stamp duty has been paid (i) if the stamp duty with which the original instrument is chargeable does not exceed five hundred rupees, the stamp duty payable shall be same as payable on the original and in other cases the stamp duty payable shall be rupees five hundred. Thus, the maximum stamp duty payable in respect of counterpart or duplicate of any instrument will be
five hundred only.

Art.28 In respect of Instrument of gift not being settlement or will or transfer where the donee is not a family member of the donor the Stamp duty payable shall be same as are payable to a conveyance deed.Where the donee is a member of the family of the donor the Stamp Duty payable shall be Rupees one thousand.
The term 'family' includes husband, wife, son, daughter, daughter in law, brother in law, grand children father and mother


Art.30 In respect of Lease of immovable property including under lease, sub lease or agreement to let or sub let whereby such lease, the rent is fixed or fine or premium or money advanced or security deposit is paid or delivered 
(i)                  Where the lease is for a term not exceeding five years - the stamp duty payable shall be one rupee for
every one hundred rupees or part thereof on the total amount of average annual rent and fine or premium or
money advanced or security deposit payable under such lease

(ii)                Where the lease is for a term exceeding five years but not more than 10 years the stamp duty payable
shall be two rupees for every hundred rupees or part thereof on the total amount of average annual rent and fine or premium or money advanced or security deposited.

(iii)               Where the lease is for a term exceeding 10 years but not more than 30 years the stamp duty payable shall
be four rupees for every hundred rupees or part thereof on the total amount of average annual rent and
fine or premium or money advanced or security deposited.

(iv)              Where the lease is for a term exceeding 30 years or does not purport to be for any definite term, the stamp duty payable shall be same as are payable for a conveyance deed under art.20( I).

(v)                Where the lease is in favour of family members the stamp duty payable is Rs.I 000/-.

                Art.41 (e) - when power of attorney is given for consideration and or when coupled with interest and authorizing the attorney to sell any immovable property the stamp duty payable shall be same as are payable to a conveyance deed under article 20(1) on consideration or on market value of the property whichever is higher.

Art. 41(ea) - when given to a promoter or developer for construction or development or sale of immovable property including a multi unit house or building or unit of apartment or flat etc., by a person having a stipulation that after construction or development, such property shall be held jointly or severally by that person and the owner or lessee, as the case may be, of such property, or that it shall be sold jointly or severally by them or that a part of it shall be held jointly or severally by them and the remaining portion part there of shall be sold jointly or severally by them, in such cases stamp duty payable will be at One rupee for every one hundred rupees or part thereof on the market value of the property or the estimated cost of construction or proposed construction or development or proposed development of property as the case may be or on the consideration for such transfer whichever is higher

Release deeds
ArtA5 (a) Where the release is not between the family members –

The stamp duty payable shall be as are payable for a conveyance deed under Article 20(1) on the market value of the property or on the amount or the value of the claim renounced or consideration for such release whichever is higher


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