Path to property -- Stamp duty and registration

PAYMENTS of stamp duty followed by the registration of the agreement are two important acts when one enters into an agreement with a developer/seller.

Both, the developer/seller and the purchaser need to be present at the sub-registrars office to register the agreement.

Stamp duty: Stamp duty is a State subject and hence would vary from state to state. The stamp duty is paid as per the true market value assessed by the Stamp Office. When an agreement is to be stamped, it needs to be unsigned and undated and after the Stamp Office affixes stamps on the agreement, one may execute the agreement.

In Maharashtra, the stamp duty depends on the true market value of the property. For the state of Maharashtra, the following would be the amount of stamp duty payable as of August 1999 with effect from September 1, 1995:

*Upto Rs 1 lakh -- Nil

*Above Rs 1 lakh to Rs 2.50 lakh -- 0.5% of the value

*Above Rs 2.50 up to Rs 5 lakh -- Rs 1,250 + 3 per cent of value above Rs 2.50 lakh

*Above Rs 5 upto Rs 10 lakh -- Rs 8,750 + 6 per cent of value above Rs 5.00 lakh

*Above Rs 10 lakh -- Rs 38,750 + 8 per cent of value above Rs 10 lakh

Also, the Agreement for Sale is treated as deemed conveyance and stamp duty is required to be paid thereon.

Registration: The agreement should be registered with the Sub-registrar of assurances under the provisions of the Indian Registration Act within four months from the date of its execution. Stamp duty should be paid prior to the Registration. In Maharashtra, as of date the registration fee is approximately 1 per cent of the true market value subject to a ceiling of Rs 20,000.

(Source: www.hdfc.com)

(To be continued)

(This guidance note is an attempt to help prospective property buyers. It is for the limited purpose of information. You are advised to consult your advocate/solicitor before undertaking any transaction/documentation. This information is provided solely for the sake of providing a broad overview to property transactions and the concepts and description of documents within this note are only general descriptions. HDFC undertakes no responsibility of determining the applicability of these concepts in any case.)