Stamp Duty & Registration

Stamp Duty basically is nothing but a type of tax collected by the government under its jurisdiction for a transaction of property. The types of property may be freehold or leasehold from land (agricultural and non-agricultural), independent houses, flats to commercial units. As a general rule, Stamp Duty is generally paid by purchasers.

Stamp duty in India was first introduced by Britishers in 1899. According to early rules, the Duty has to be deposited in the government treasury for all property transactions, which are done through document or instrument under the provisions subscribed in Indian Stamp Act of 1899 and Bombay Stamp Act of 1958. The amount, collected by government-appointed Stamp collectors, would go directly to the concerned State under which the individuals are taxed. In many states still the Indian Stamp Act, 1899 is in force. The percentage of stamp duty levied varies in different states.

The purpose of enacting such an Act is to raise revenue for the local governments. Additionally, payment of stamp duty imparts legality to the document and this can be submitted as an authentic document in courts.

The Ready Reckoner (RR) rates revised every year by the State Government on January 1, are the basis on which the market value of properties for stamp duty and registration charges are calculated.

As per the provisions of Section 12, any person executing an instrument affixed with adhesive stamp, shall cancel the adhesive stamp so affixed by writing on or across the stamp his name or initials. If such an adhesive stamp has not been cancelled in the aforesaid manner, such a stamp is deemed to be unstamped.

Instrument means any document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded.

As per the provision of Section 13 of the Indian Stamp Act, 1899, any instrument on an impressed stamp, shall be written in such manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument i.e., cancel the adhesive stamp so affixed by writing on or across the stamp his name or initials. If such an adhesive stamp has not been cancelled in the aforesaid manner, such a stamp is deemed to be unstamped.