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FREQUENTLY ASKED QUESTIONS ON STAMP DUTY

Q. What is Stamp Duty?
A. It is a tax collected by the government, which must be paid on time. If there is delay in payment, it attracts penalty.

Q. Is Stamp Duty payable on the instruments or transaction?
A. A stamp duty paid instrument/document is a proper and legal instrument/document and such as gets evidentiary value and is admitted as evidence in courts. The instruments/documents not properly stamped are not admitted in evidence by the court.

Q. When is the Stamp duty payable?
A. It is payable either before execution of the document/instrument or on the next working day of executing such instrument/document instrument means putting signatures on the instrument by persons executing the instruments/s.




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Q. What is the penalty for the delayed payment?
A. If Stamp duty is not paid on time, it attracts the penalty at the rate of 2% per month on the deficit amount of Stamp duty. However maximum penalty can be only 2 times of the deficit amount of the stamp duty. (This amendment has come into force from 01-05-2001).
Documents lodged with sub-registrar/superintendent of stamps prior to any amnesty scheme will attract lump sum penalty of Rs. 250 or Rs. 300 only, as the case may be.

Q. Who is liable to pay stamp duty?
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.

Q. In whose name are the Stamp papers required to be purchased?
From 01/05/1994 stamp papers 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 it is used for preparing the agreement it will be treated as if no stamp paper is used. However it will not make the agreement invalid and can be enforced in law if proper stamp duty is paid subsequently.

Prior to 01/05/1994 stamp paper could be purchased in any name and was valid for any period of time. However from 01/05/1994 stamp paper has a life of six months only and after that it is treated as ordinary paper as if it has no stamp.

Q. Is stamp duty on the consideration amount stated in the document or on the market value of property as determined by stamp duty authorities?
A.Stamp duty is payable on the market value of property. Market value of any property is determined by the stamp duty Authorities on the basis by the government every year on 1st of January. However where property is sold or allotted by Government or Semi-Government body or a government Undertaking or a local authority, like LIC. CIDCO, BMC MHADA, INCOME TAX DEPARTMENT etc., on the basis or predetermined price, then that value is accepted as market value for the purpose of stamp duty




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.

Q. What is the market value of a property?
A. Market value in relation to any property which is the subject matter of the instrument means the price which such property would such property would have fetched if sold in open market on the date of execution of such instrument or document or the consideration stated ion the instrument whichever is higher. However, for payment of stamp duty, market value is the value as worked out as per ready reckoner or the consideration stated in the instrument whichever is higher. As per new amendment in the Income Tax act The Market Value for the purpose of Capital Gains Tax is the same as the Market Value for Stamp Duty payment, which is worked out as per ready reckoner. Hence it is advisable that the seller should record actual selling price worked out with the help of ready reckoner and avoid under valuation with the intention to save capital gain tax.

Q. What is the use fullness of Stamp Duty Ready Reckoner?
A. As explained earlier Stamp Duty is charged on the market value of the property purchased and not on the agreement value. Now the question arises as to how to arrive at the Market Value. The Stamp Duty Ready Reckoner, by Santosh Kumar and Sunit Gupta, contains precisely this information in easy to understand language. It contains market rate of property fixed by government for each zone in each locality / village / division. It further contains details about certain additions and allowable deductions to be made in valuation. It also contains valuation factor to help ascertaining the market value. In all it contains everything including all guideline, rule, table, rate and map that is required while arriving at the market value on which the stamp duty is charged. Further all these rule, tables, guidelines and rates are adopted as per guidelines approved by the Town Planning and Valuation Authority, Government of Maharashtra and which is used by Stamp Duty and Registration department to ascertain Market value of the property under consideration. This book is available in market for Rs. 250/- only.

Q. Where can a person pay stamp duty?
A. Stamp duty could be paid legally without adjudication, on the basis of the Ready Reckoner, at the following offices. An amount up to Rs. 25,000 is accepted in cash and an amount above that is to be paid by bank draft or pay order drawn in favour of the "Superintendent of Stamps, Mumbai" payable at Mumbai. An amount above Rs. 25,000 can also be paid in cash at Reserve Bank Of India, through an duty authorised challan. A duly authorised challan can be obtained from General Stamp Office at Fort.

General Stamp Office, Town Hall Building, Gorund Floor, Near Horniman Circle, Fort, Mumbai - 400 001. Office of The Sub Registrar and Administrative officer, Old Custom House, Ground Floor, Near Horniman Circle, Fort, Mumbai - 400 0023.




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General Stamp Office, Extended Sales Counter MMRDA Building, 1st Floor, Near Sales Tax Office, Bandra Kurla Complex, Bandra East Mumbai - 400 051.

Office of the Sub Registrar, New Administrative building, Near Ration Office, Ramkrishna Chemburker Marg, Chembur, Mumbai 400 071.

Also there are various authorised stamp vendors from whom stamp paper of the required amount can be purchased and agreement made on them, which is another way of paying stamp duty. Stamp vendors sell stamp papers of face value up to Rs. 10,000 and one can purchase as many stamp papers as one wants from them. However take proper precaution before buying high value stamp papers from stamp vendors in view of recent Fake Stamp Paper Scam.

Q. What are the office hours of stamp offices?
A. Stamp offices work from Monday to Saturday, except the second and fourth Saturday and public holidays, between 10 a.m. to 4.30 p.m.

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