STAMP DUTY ON LEAVE AND LICENCE AGREEMENT:
By Bankimchandra P. Khona
1) In Maharashtra Stamp Duty on Leave & Licence Agreement is payable as per Article 36 (A) of Schedule – I of Bombay Stamp Act, which reads as under:-
“36A. Leave and Licence Agreement.
(a) Where the leave and licence
Agreement is with a licence fee
or rent fixed or otherwise,-

(i) for a period not exceeding Two Thousand rupees;
one year without any renewal
clause;

(ii) for a period exceeding one Ten thousand rupees;
year but not more than three
years without any renewal
clause;

(iii) For a period exceeding three The same duty as is
years with or without any leviable on a lease
renewal clause; article 36;

(b) Where the leave and licence The same duty as is
agreement is executed for leviable under clause
security deposit or money (a)(i), (ii) or (iii),
advanced with or without licence as the case may be and
fee or rent fixed. in addition one percent of security deposit or
money advanced or to be
advanced.

Considering 36A (a) (i) & ( ii) – very interesting situation arises. 36A (a) (i) & (ii) provides stamp duty in a case where the licence is for a period not exceeding one year without any renewal clause. What happens if licence is not for a period exceeding one year but there is renewal clause. In a case where the licence is not exceeding one year and there is a provision of renewal clause it is respectfully submitted that the Article 36 A (a) (i) will not apply. In fact whole Article 36A will not apply. Similarly, if licence is exceeding for a period of one year but it is not more than three years and if there is a provision for renewal then 36A (a) (ii) also does not apply. In fact 36A will not apply.

 
Then the question arises what happens to Leave & Licence Agreements wherein they are for less than period of one year or more than one year or less then three years or if there is a provision of renewal clause , Article 36A of Schedule – I of Bombay Stamp Act will not apply. The Article which will apply to such Leave & Licence Agreement is an Article 5 (h) of Schedule – I ) of the Bombay Stamp Act, which reads as under:-

” Agreement or its records or memorandum of Agreement ( H), if not, otherwise provided for. Stamp Duty on such Agreement is Rs.20/-.

4) It is, therefore, submitted that stamp duty payable in a case of Agreement of Leave & Licence for a period not exceeding one year but there is renewal clause or Leave & Licence Agreement for a period exceeding one year but not more than three years but with renewal clause then such Leave & Licence Agreement will be required to be stamped with only Rs.20/- and not Rs.2000/- or Rs.10,000/- as wrongly contended by the Stamp Authorities and the Sub-Registrar. Therefore, it is in the interest of parties if they want to pay Rs.20/- as licence fee in a case of licence less than three years should have a clause of renewal.

Properties on Collector’s land now allowed to be registered
By Advocate Vinod Sampat

Hundreds of properties transactions were refused to be registered which were on collector’s land in Mumbai after Shri D N Abade, Sr. Officer of Revenue & Forest Department wide circular dated 25th January 2008 given direction to the office of Superintendent General of Registration & Collector of Stamps Mumbai as well as all the deputy Inspectors General of Registration, Controller of Stamp & Sub Registrar of Assurance, stating that if the property is situated on Collector’s land then in case of sale of such properties or giving such properties on leave & license basis, registration of such property documents cannot be stamped. This was necessitated on account of suit filed in Supreme Court bearing suit no. 7800 of 2001.
The Collector had given directions to Sub Registrar office Mumbai in a circular bearing no. 2640/2001/1130 dated 13th March 2001, not to register documents of properties situated on Collector’s land until and unless No Objection Certificate (NOC) received from Collector’s office.
Wide circular dated 25th January 2008 bearing no. 2007/389/M1, Revenue & Forest department directives have been given to Register such documents.
Properties situated on collector’s land , especially in South Mumbai, were badly affected. The sale value of such properties were all time down. Nariman Point, oldest CBD area of Mumbai was deserted due to enhanced lease from collector. Now such properties will be having a clear documentation without any NOC and hitch.

Question and Answers
- Accommodation Times
Stamp duty on Agreement for Transfer of Share Flat :
Q.1. Is it necessary to pay the stamp duty exceeding Rs. 20/- on an Agreement for Transfer of shares in a co-operative society which gives to the Transferee the right to use and occupy a flat in a co-operative society ? If yes at what rate ?
Ans. The stamp duty payable on an Agreement for transfer of shares in a co-operative society, which gives to the transferee a right to use, occupy and enjoy a flat in a co-operative society exceeds Rs. 200/-. In the case of non-residential premises it is at the flat rate of 10% of the true market value. However, in the case of residential premises, the stamp duty payable on the agreement is as per Article 25 of the Bombay Stamp Act as under :-
“Article 25. Conveyance (not being a transfer charged or exempted under Article 59) –
On the true market value of the property which is the subject matter of the Conveyance –
(d) (1) if relating to residential premises consisting of building or unit.
(A) by, or in favour of, a co-operative housing society registered or deemed to have been registered, under the Maharashtra Co-operative Societies Act, 1960; or
(B) to which the provisions of the Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963, or the provisions of the Maharashtra Apartment Ownership Act, 1970 apply; or
(C) by such society in favour of its member or incoming member whether in consequence of purchase of its shares or not; or
(D) by a member of such society in favour of another member and incoming member whether in consequence of transfer of its shares to another member or not; and the value of which –
(i) does not exceed rupees 1,00,000. — NIL
(ii) exceeds rupees 1,00,000 but does not exceed rupees 2,50,000 — 0.5 per cent of the value
(iii) exceeds rupees 2,50,000 but does not exceed rupees 5,00,000 – 1,250rupees plus 3 per cent of the value of above rupees 2,50,000
(iv) exceeds rupees 5,00,000 but does not exceed rupees 10,00,000 — 8,750 rupees plus 6 per cent of the value above rupees 5,00,000
(v) exceeds rupees 10,00,000. 38,750 rupees plus 8 per cent of the value above rupees 10,00,000.
(2) if relating to land for construction of residential premises and falling under the descriptions in items (a), (c), or (d) of sub-clause section (1). – The same duty as is applicable under sub-clause (1).
Liability to pay Stamp Duty :
Q.2. Who is liable to pay the stamp duty in respect of the transfer of shares and flat in a co-operative society ?
Ans. The stamp duty in respect of transfer of shares and a flat in a co-operative society could be decided as regards payment by an agreement between the parties. Either one of them can agree to pay or they may agree to share in such proportion as they may agree amongst themselves. In the absence of such contract, under section 30(b) of the Bombay Stamp Act the same is payable by the transferee i.e. the purchaser.
Stamp Duty as per Market Value :
Q.3. On an Agreement for Transfer of share in a co-operative society the parties have paid the stamp duty as per the value stated in the agreement. However at the time stated in the agreement. However at the time of registration of such agreement the sub-registrar concerned insisted for the payment of the stamp duty as per the market value calculated on the basis of ready reckoned.
Whether the sub-registrar can do so ? If the stamp duty is not paid as demanded by the sub-registrar whether he can impound the agreement ? In such case what remedies are liable to the Transferor and the Transferee ?
Ans. The stamp duty on an agreement for transfer of shares in a co-operative society is payable on the true market value of the premises being transferred. The value stated in the agreement does not determine the stamp duty payable on the same. For the sake of convenience, the State Governmetn has introduced a Ready Reckoner as the market value of the properties in Greater Mumbai. Such Ready Reckoner is not a final word. The obligation of the party to pay stamp duty is provided under the Act on the amount of the true market value. If according to the party the market value is different than the market value calculated on the basis of the rate mentioned in the basis of the rate mentioned in the Ready Reckoner then the party cab refuse to pay additional stamp duty and the sub-registrar will be required to forward the document to the Collector under section 32 (a) of the Bombay Stamp Act for determining the correct market value and the stamp duty payable on the same. In case the party does not accept the decision of the Collector then the said party can go into appeal under section 32 (B) of the Act before the Dy. Inspector General of Registration and Dy. Controller of Stamps.
Stamp Duty on Transfer of Shop :
Q.4. At what rate the stamp duty is payable on the agreement for Transfer of a shop in a co-operative society ?
Ans. A shop is non-residential premises and therefore, the concessional rates prescribed under Article 25(d) for residential premises do not apply. The stamp duty payable is 10% of the true market value of a shop, in the case of an agreement for transfer of shop in a co-operative society.
Stamp Duty on Transfer of Garage :
Q.5. At what rate the stamp duty is payable on an Agreement for Transfer of a garage in a co-operative society ?
Ans. The stamp authorities consider a garage to be non-residential and therefore, as in the case of shop stamp duty is payable at the rate of 10% of the true market value of the garage.
Q.1. Can a Co-operative Housing Society be formed if the builder refuses to co-operate ? What is the minimum number of members required to form a Co-operative society ? How many members consent is required to form a Co-operative Society ?
Ans.1. Section 10 of the Maharashtra Ownership flats (Regulations of the Provisions of Construction Sale, Management and Transfer) Act makes it obligatory on Promoter (Builder to submit proposal for registration of a Co-operative Housing Society, within a period of four months from the date on which the minimum number of members required to form such a society have purchased the flats. Yes, a Co-operative Society can be formed even if the builder does not co-operative. In such a situation a notice should be issued to the builder. A copy of such notice has also to be sent to the Dy.Registrar / Asstt. Registrar of the concerned ward with a request to call upon the builder to explain his stand on the above and matter. The minimum number of members required to form a Co-operative Society is ten. However societies can be formed with less than ten members after obtaining the permission from the Competent Authority. The Government’s Agriculture & Co-operation Department has by its Circular No. CCSH-C079-36997-1289-4c dated 01-03-1980 laid down the criteria or exempting Co-operative Housing Societies with less than ten members. The consent of a minimum of 60% of the total number of flat purchasers is required to form a Co-operative Housing Society.
Q.2. What are the formalities that have to be complied by the outgoing Managing committee/Returning Officer in the year in which elections are to be held ? Please explain the same along with a model election program duly prepared by the Returning Officer ?
Ans. 2. The outgoing Managing Committee has to appoint a returning officer who has to conduct the elections. The returning officer has to give a declaration that he shall not contest the elections. The returning officer has to give a declaration that he shall not contest the elections. The Returning Officer than draws up an election program.
The model election program would include : a) Publication of Provisional list of members of the Society as on 30th June/31st March on the Notice Board of the society. b) Last date for receipt of suggestions or objection to the names of members in the Provisional list. C) Publication of the final list of members eligible to vote on the Notice Board of the society. d) Issue of Notice to members in the final list inviting nominations e) Last date for receipt of nominations. f) Scrutinizing of nominations. g) (i) Publication of the list of valid nominations (ii) Communications of reasons for rejection of nominations to the candidate concerned. h) (i) Last date for withdrawal of nominations. (ii) Publication of the final list of valid nominations excluding the withdrawals if any. I) Publication on the Notice Board the date, time and place of voting j) (i) Voting (ii) Counting of votes (iii) Publication of the list of the candidates with votes polled by them on the Notice Board. K) Declaration of the result of election at the General Body Meeting.
For the above said purpose the returning officer is entitled to appoint necessary staff and shall have access to the relevant records of the society.
Q.3. Our Co-operative year ends on 30th June. What are the Statutory Obligations that have to be complied by the society at the close of the Co-operative year ?
Ans 3. Apart from the day to day working of the society the office bearers have to approve the statement of Accounts for the Co-operative year July to June. The date of the Annual General Body Meeting should also be fixed in the Managing Committee Meeting. The office bearers must also prepare the Annual Report of the society and must also prepare the agenda for the Annual General Body Meeting.
The Below mentioned functions will have to be carried out by Co-operative Societies at the close of the Co-operative year.
1) Close accounts as on 30th June.
2) Prepare receipts and payments statement and profit and loss account for the proceeding co-operative year and balance sheet as at 30th June before August 14.
3) Submit copies of statements of accounts to the Dy./Asstt..Registrar and the auditor of the society by August 31.
4) If the above time for finalization of accounts before August 15, with a copy of the managing committee’s resolution justifying extension of time, to the Dy/Asstt. Registrar of the Ward wherein your society is situated.
5) Hold Annual General Body Meeting of the society on or before November 14.
6) IF holding of the Annual General Meeting within the stipulated period is not possible, apply for extension of time to the Dy./Asstt. Registrar of the Ward before November 14th along with a copy of the managing committee resolutions, explaining reasons for not being able to hold the meeting in time. The maximum extension of time that can be granted by the Dy./Asstt. Registrar, is upto 14th February next.
7) Society has no authority to convene Annual General Meeting after November 14, if no extension is soughtfor, but not granted or meeting is not held within the extended time.
Each member should have notice of the meeting of such period as is mentioned in the bye-law No. 166/169. A copy thereof should be sent to the Dy/Asstt. Registrar, of the Ward. Notice and agenda should be accompanied by statement of accounts and committees report . The notice with its accompaniments must be exhibited on the notice board.
9) Start business of the meeting if there is no quorum and you follow procedure as laid down in bye-law No.39.
10) Do not postpone Annual General Meeting for want of statutory audit. Place before Annual General Body Meeting statements of accounts as finalised by the Managing committee. The Annual General Meeting could accept them subject to audit. A) The bye-law Nos. 100 and 166 are for flat-owners societies. B) The bye-laws No.s102 and 169 are of open plot type societies.
Q.4. What are the rights and liabilities of members of a Co-operative Society ? Can defaulters vote at the General Body meeting ?
Ans 4. The Right and Liabilities of members of Co-operative Society are briefly summarised as under. A) Right of Members. (i) To sell his shares. (ii) TO exchange his flat. (iii) To get certified true copies of certain documents including the bye-laws of the society (section 32) (iv) to sub-let his flat with the permission of the Society (Bye-law No.45 (1). (v) To receive notice of AGM/SGM (vi) To participate, discuss and vote at the AGM/SGM (vii) To contest the elections and to vote at the elections. (viii) To file a nomination with the society (ix) To request the society to have an associate members name added along with his name. (x) To draw the attention of the Committee on various matters affecting the interest of the members. (xi) To apply to the society for loan. (xii) To instruct the office bearers to call a Special General Body Meeting if the requisite number of signatories sign the application (xiii) To draw the attention of the Dy./Asstt.Registrar for various acts of the Society pertaining to irregularities and/or omissions.
Liabilities of Members (i) He has to abide by the provisions of the M.C.S. Act 1960, M.C.S. Rules 1961 and bye laws of the society (ii) To pay the legitimate dues of the Society irrespective of his grievances/dispute with the society (iii) To present any record which is required for audit purpose as per section 81 & 83 of the M./C.S. Act 1960.
I would like to add that the defaulting members can definitely vote and participate at the General Body Meeting. They are however not allowed to contest the elections.
Q.5. How does the Co-operative Society apply for Permanent Account Number ?
Ans. A Co-operative Society is required to make an Application in Form No. 49A for allotment of Permanent Account Number.
Q.6. Explain the procedure with regard to deduction of tax at source by a Co-operative Society when the payment above Rs. 20,000/- have been paid to a contractor for repairs and maintenance ?
Ans. In case of payment to contractors by a co-operative society exceeding Rs. 20,000/- the tax is required to be deducted at the time of credit or payment, whichever is earlier. The rate of tax to be deducted at source is 2% in case of payment to contractor and 1% in case of payment to sub-contractor. The tax deducted at source should be deposited in Government Account within 1 week from the last day of the month in which the dedution is made.
The person deducting tax is required to file Annual return in form No. 76c by 30th June. The person deducting tax is also required to give certificate within one month from the end of the month during which credit/payment is made, in Form No. 16A to the payee.
Q.7. Which are the challans that have to be submitted by the society to the Income-tax Authorities ?
Ans. Challan No. 270 for payment of regular taxes if any. Challan No.271 for payment of the Tax deducted at source to the Central Government.
Q.8. What are the penalties on a co-operative society if, it does not deduct TDS on payments made to Contractors ?
Ans. If no tax is deducted at source on payment made to Contractors the person is liable to pay penalty U/s. 271C of 100% of the amount of tax which is required to be deducted at soruce.
Q.9. What are the formalities as regards deduction of tax at Source ? Within how many days the same should be deposited in the bank ? Please mention challan number in which the money has to be deposited on account of payment deducted on Contractors ? Does the society have to file an income tax return/Declaration ? if yes what is the number of the Income-tax return /Declaration ? if yes what is the number of the Income-tax return/declaration ?
Ans. Reply as regards TDS provisions is already covered in our earlier replies. As regards filing of income-tax return/Declaration it is compulsorily for all socieities having taxable income to file their return of income. Return form No. 2 is required to be filed with the Income-tax officer.
Q.10. On which of the items does the co-operative society have to pay Income-tax ?
Ans. Co-operative is subject to tax on all incomes except as specified U/s. 80P of the Income-tax Act.
Q.11. What are the deductions available to a co-operative society if it has taxable income ?
Ans. A co-operative society is eligible to claim, deduction under the following sections :
U/s. 80G & 80 GGA in respect of donations given by society.
U/s. 80HH Profits & gains from newly setup, Industrial undertaking or Hotels in backward areas.
U/s. 80HHA Profits of newly setup small scale industrial undertaking.
U/s. 80HHB Profits from projects outside India.
U/s. 80HHC Tax incentives for exports.
U/s. 80HHD Deduction in respect of earning in, convertibel foreign exchange.
90HHE Profit form Export of Computer software.
80IA deduction in respect of Industrial undertaking setup on or after 1.4.91.
800 Deduction in respect of Royalties from certain foreign Enterprises
AND
80P Deduction in respect of income of a co-operative societies engaged in
(a) Carrying on business of banking or providing Credit facilities to its members.
(b) A cottage industry.
(c) The marketing of the agricultural produce of its members.
- the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purposes of sypplying them to its members.
- The processing without the aid of power, of the agricultural produce of its members.
- The collective disposal of the labour of its members.
- Fishing or allied activities, that is to say, the Catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipments in connnection therewith for the purpose of supplying them to its members.
Q.12. Please explain with an example the tax liability with regards to the quantum of capital gains tax that has to be paid by a flat purchaser if he purposes to purchase a office in a co-operative housing society ?
Ans. Please note the question is very vague. We reply on the presumption that the flat owner has sold his residential flat. In this case the difference between sale proceeds and the cost of the flat sold would be the capital gains in the hands of the seller. In case if the flat seller has held the flat for more than 3 years then it would amount to long term capital gains and if he invests the entire capital gian in purchasing a new flat then the entire long term capitla gains would be exempt from tax.
EX.
If the cost of the residential flat
purchased in 1980. Rs. 1,00,000/-
The sale proceeds of the flat
sold in 1998-99 Rs. 10,00,000/-
Investment in New Flat Rs. 10,00,000/-
The indexed cost would be worked out as under .
Since the flat is purchased before 1.4.1981 the value as on 1.4.81 is to be considered for indexation. The value as on 1.4.81 is assumed at Rs. 2,00,000/-
2,00,000 x 389/100 = 7,78,000/-
The long term capital gain would be 10,00,000- 7,78,0000
= 2,22,000/-
However he is not required to pay any capital gains tax as the entire sale proceeds is invested in purchasing a new flat.
Q.13. Please explain with an example the tax liability with regards to the quantum of capital gains tax that has to be paid by a flat purchase if he proposes to purchase a Office in a co-operative housing society ?
Ans. This question too is vague. It is presumed that the person has sold a residential flat and would like to invest the sale proceeds in purchasing an office premises. In that case no deduction is available and the person is required to pay the capital gains tax.
(Long term/short term) as the case may be
Ex. If the cost of the residential flat purchased in 1994 is Rs. 1,00,000
The sale proceeds of flat sold in 1998-99 Rs. 10,00,000
The indexed cost would be Rs. 1,00,000 x 389/259 (389-Index cost for 98-99), ( 259 – Index cost for 1994)
Long term capital gain = 1,50,200 /-
= 10,00,000 – 1,50,200
= 8,49,800
The assessee proposes to make investment of the sale proceeds in Office premises and therfor he will not get any deduction and would have to pay tax @ 20% omn Rs. 8,49,800 = Rs. 1,69,960 if he is an Individual and also liable to pay surcharge @ 10% of tax if assessee is resident.
Q.14. What are the different options of tax planning available to a flat purchaser as well as office purchaser as regards tax planning from the capital gains tax payment point of view ?
Ans. Please refer to Ans. No. 12 & 13
Q.15. Please give the cost inflation index from 1981 to 1999 and explain the implications with an example ?
Ans. Asst. year Cost inflation index
1981-82 100
1982-83 109
1983-84 116
1984-85 125
1985-86 133
1986-87 140
1987-88 150
1988-89 161
1989-90 172
1990-91 182
1991-92 199
1992-93 223
1993-94 244
1994-95 259
1995-96 281
1996-97 305
1997-98 331
1998-99 351
1999-2000 389
For EX :
If a seller has purchased his flat in the year 1969 for a sum of Rs. 2,00,000/-. Then the indexed cost deductible from the sale proceeds of flat sold in 1999 for the purpose of determinaton of long term capital gain would be as under.
Orginal cost Rs. 2,00,000/-
Cost as on 13.4.1981 to be determined by Approved Valuer Rs. 5,00,000/- (Assumed)
Therefore Indexed cost = Rs. 5,00,000 x 389 / 100 (389-indexation for 1999) (100-indexation for 1981)
Q.16. Please submit a speciment of computation of income for Co-operative Society having taxable income. The taxable income for the society is as under :-
a) Sale of well water Rs. 25,000/-
b) Transfer fees Rs. 2,00,000/-
c) Income from advertisement boarding Rs. 75,000/-
d) Sale of F.S.I. Rs. 25,00,000/- ?
Ans : Computation of Taxable income of Co-operative Society
1. Sale of Well water Rs. 25,000/-
Income from Advertisement Boarding Rs. 75,000/-
Sale of FSI Rs. 25,00,000/-
Gross total Income Rs. 26,00,000/-
Less : Deduction under section 80P(2) (c) (ii) Rs. 50,000/-
Total Taxable Income Rs. 25,50,000/-
Tax @ 35% Rs. 8,92,500/-
Note :
1. It is presumed that the society is a society other than consumer’s society.
2. Transfer fees is constribution from members for benefit of society so not taxable.
Q.1. Which are the documents that have to be compulsory registered ? Does one have to compulsorily register immovable properties in the below-mentioned cases :- (a) Family arrangement, (b) Lease above one year, (c) Declarations, (d) Gifts of Immovable properties ?
Ans. : Section 17 of the Indian Registration Act deals with the list of documents that have to be compulsorily registered. The said section states that the following documents should be registered if the property to which they relate is situated in district in which and if they have been executed on or after the date on which, Act.No.XVI of 1864, of the Indian Registration Act, 1866 (XX of 1866) or the Registration Act, 1871 (VII of 1871), or the Registration Act, 1877 (III of 1877), or this Act come or comes into force namely: (a) instrument of gift of immovable property (b) other non-testamentary instruments which purport or operate to create, declare assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in man immovable property; (c) non-testamentary instruments, which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignments, limitation or extinction or any such right, title or interest; (d) lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, and (e) non-testamentary instrument transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in an immovable property :
Provided that the state government may, by order published in the official gazette exempt from the operation of this sub-section any lease executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees.
(2) Nothing in clause (b) and (c) of sub-section.
(1) applies to
(i) any composition deed; or
(ii) any instrument relating to shares in a Joint Stock Company, notwithstanding that the assets of such company consist in whole or in part of immovable property; or (iii) any debenture issued by any such company and not creating, declaring, assigning limiting or extinguishing any right, title or interest to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures ; or (iv) any endorsement upon or transfer of any debenture issued by any such company; or (v) any document not itself creating, declaring, assigning , limiting or extinguishing any right, title or interest of the value of the hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title, or interest; or (vi) any decree or order of a court or (vii) any grant of immovable property by the government or (viii) any instrument of partition made by a Revenue Officer, or (xi) any order granting a loan or instrument of collateral security granted under the Land Improvement Act, 187 (XXVI of 1871), or the Land Improvement Act, 1883 (XIX of 1883); or (x) any order granting a loan under the Agriculturists loans act, 1884 (XII of 1984); or instrument for securing the repayment of a loan made under this Act or any order made under the Charitable Endowments Act, 1890 (VI of 1890), vesting any property in a Treasurer of Charitable Endowments or diversity any such Treasurer of any property; or (xi) any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage-money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or (xii) any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue Officer. (Explanation – A document purporting or operating to effect a contract for a sale of immovable property shall not be deemed to require or ever to have required registration by reason only of the fact that such document contains a recital of the payment of any earnest money or of whole or any part of the purchase money)
(3) Authorities to adopt a son, executed after the first day of January 1872, and not conferred by a will, shall also be registered.
From the above said definition it is clear that
(a) Gift of Immovable Properties,
(b) Instruments which purport or operate to create, declare, assign limit or extinguish right in immovable property above Rs. 100/-,
(c) Lease of immovable property will have to be compulsorily registered.
However, exception has been made from compulsorily registration in instrument of below mentioned types. : – (a) Corporation Deed, (b) Shares and debentures of company, (c) Grant of immovable property by the Government, (d) Instrument made by revenue officer. Whenever with regards to immovable properties, subject to the exceptions any sought of right, title and interest in any nature, whatsoever above Rs. One Hundred is effected registration is compulsory.
Family Arrangements pertaining to immovable properties for the value above Rs. 100/- are compulsory registerable. Lease of immovable property above one year are compulsorily registrable. Gift of immovable properties are also compulsorily registrable.
Q.2. At which place should the documents be presented for registration ?
Ans. : As per Section 28 and 29 of the Registration Act the document should be presented for registration at the office of the Sub-Registrar of Assurances within whose sub district the whole or some portion of the property to which such document relates is situated or in the office of the Sub-Registrar situated at Bombay, Delhi, Madras or Calcutta.
Q.3. Within how much time should one expect to receive back the original documents ?
Ans. : there have been a number of incidents that the documents have been registered in 1970’s and 1980’s and the same have not been received. in some cases as per the information made available to me, the documents have even been lost. It has been observed that there has been a lack of accountability. Even a Public Relation Officer is not appointed by the Office of the Inspector General of Registration. This has naturally increased the hardship of the purchaser/s. Innumerable complaints have also been lodged against the above said delays. Realising these difficulties the dynamic Chief Minister has given a verbal assurance that the document registered with the Office of the Sub-Registrar will be delivered back within a period of 15 days. Now as per the rules made by the Office of the Sub-Registrar will be delivered back within a period of 15 days. Now as per the rules made by the Office of the Sub-Registrar, the Sub-Registrar can even refuse to register the document. The promise of Chief Minister if implemented by the registering authorities will definitely by a boon for the person/s registering the document.
Q.4. Normally how much times does it take to register a document with the Sub-Registrar ?
Ans. : The parties are supposed to comply with a set of formalities which have already been discussed. It is my personal experience that it can take more than one hour to complete all the above said formalities after one’s turn comes. Normally it takes about 2 to 3 hours for completion of the registration formalities.
Q.5. Is it advisable that some of the signatories may go at a latter date to sign at the Sub-Registrar Office ?
Ans. : Suppose a document has been signed by four parties, for certain reasons say one of the parties is not able to go for registration on a specified date. In such circumstances the remaining parties can go and register the document. The other party can go and register the document at a latter date. However, the registration formalities have to be completed within the specified time limit.
Q.6. Flat has been purchased from the builders, the builder has suggested that the purchaser should go and register the document/s and the builder shall go and sign the document/s at a latter date. Is the same permitted ?
Ans. : Builders with a view to save their time normally do not go with the purchasers at the time of registration. The purchasers may register the document/s and give the copy of the registration receipt to the builder. The purchaser should ensure that the builder has gone and signed the document/s with the Sub-Registrar within the specified time limit.
Q.7. What should the parties do if the Registrar refuses to register the document/s ?
Ans. : On refusal of the document by the Registrar the parties or their representative/s u/s. 72 & 73 of the Indian Registration Act, 1908 can within 30 days from the date of order or refusal institute proceedings in the Civil Court in whose jurisdiction the office of the Registrar is situated.
Q.8. What are the normal grounds for non-registration of document/s ?
Ans. : The normal grounds for refusal of registration of document/s are :
(a) Document is opposed to public policy;
(b) Parties have not complied with the formalities as laid down by the Registration Act and by any reasons by which registering authority is not satisfied;
(c) The survey no. of the property is not mentioned in the document/s ;
(d) The language in which the document is executed is not in the language that is normally prevalent in the area where the office of the registering authority is situated.
Q.9. What is the effect of non-registration of the document/s which has got to compulsory registered ?
Ans.: The title of the purchaser who has purchased the property will be defective. Any document/s requiring compulsory registration u/s 17 or by any provision of the Transfer of Property Act, 1882, if not registered, no document/s shall :-
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property of concerning such power, unless it has been registered. Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 to be registered may be received as evidence of the contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1887 or as evidence as part performance of a contract for the purpose of Section 53A of the Transfer of Property Act, 1882 or as evidence of any collateral transaction no required to be effected by a registered instrument.
Als u/s. 50, every document/s requiring compulsory registration or optional registration, if duly register take effect as regards the property comprised therein against every unregistered document/s relating to the same property and not being a decree of court, whether such unregistered document/s be of the same nature as the registered document/s or not.
Q.10. How is the title of the property verified ?
Ans.: Normally the person purchasing the property has to ensure that the seller has a good and marketable title. In order to find out if the title of the seller is clear and marketable, one has to take search of the property. The search of the property has to be taken at the offices of the relevant Sub Registrars, normally 30 years search has to be taken.
The parties can also ask copies of the documents lodged with the office of the Sub-Registrar to the purchaser. The objections pertaining to the title of the property can be easily verified after taking the search. Example: If the party has mortgaged and registered the documents with the Sub-Registrar of Assurances then it can be known only after taking the search of the property. After satisfying the title of the property the party should proceed with the transact.
Q.1. How does the Co-operative Society apply for Permanent Account Number ?
Ans. A Co-operative Society is required to make an Application in Form No. 49A for allotment of Permanent Account Number.
Q.2. Explain the procedure with regard to deduction of tax at source by a Co-operative Society when the payment above Rs. 20,000/- have been paid to a contractor for repairs and maintenance ?
Ans. In case of payment to contractors by a co-operative society exceeding Rs. 20,000/- the tax is required to be deducted at the time of credit or payment, whichever is earlier. The rate of tax to be deducted at source is 2% in case of payment to contractor and 1% in case of payment to sub-contractor. The tax deducted at source should be deposited in Government Account within 1 week from the last day of the month in which the dedution is made.
The person deducting tax is required to file Annual return in form No. 76c by 30th June. The person deducting tax is also required to give certificate within one month from the end of the month during which credit/payment is made, in Form No. 16A to the payee.
Q.3. Which are the challans that have to be submitted by the society to the Income-tax Authorities ?
Ans. Challan No. 270 for payment of regular taxes if any. Challan No.271 for payment of the Tax deducted at source to the Central Government.
Q.4. What are the penalties on a co-operative society if, it does not deduct TDS on payments made to Contractors ?
Ans. If no tax is deducted at source on payment made to Contractors the person is liable to pay penalty U/s. 271C of 100% of the amount of tax which is required to be deducted at soruce.
Q.5. What are the formalities as regards deduction of tax at Source ? Within how many days the same should be deposited in the bank ? Please mention challan number in which the money has to be deposited on account of payment deducted on Contractors ? Does the society have to file an income tax return/Declaration ? if yes what is the number of the Income-tax return /Declaration ? if yes what is the number of the Income-tax return/declaration ?
Ans. Reply as regards TDS provisions is already covered in our earlier replies. As regards filing of income-tax return/Declaration it is compulsorily for all socieities having taxable income to file their return of income. Return form No. 2 is required to be filed with the Income-tax officer.
Q.6. On which of the items does the co-operative society have to pay Income-tax ?
Ans. Co-operative is subject to tax on all incomes except as specified U/s. 80P of the Income-tax Act.
Q.1. Do Non-resident Indian Citizens require permission of Reserve Bank to acquire residential / commercial property in India ?
Ans. No
Q.2. Do foreign citizens of Indian Origin require permission of Reserve Bank to purchase immovable property in India for their residential use ?
Ans. Yes. However, Reserve Bank has granted general permission to foreign citizen of Indian Origin, whether resident in India or abroad, to purchase immovable property in India for their bonafide residential purpose. They are, therefore not required to obtain separate permission of Reserve Bank.
Q.3. In what manner the purchase consideration of residential immovable property should be paid by foreign citizens of Indian Origin under the general permission ?
Ans. The purchase consideration should be met either out of inward remittance in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.
Q.4. What are the formalities required to be completed by foreign citizens of Indian Origin for purchasing residential immovable property in India under the general permission ?
Ans. They are required to file a declaration in Form IPI 7 with the Central Office of Reserve Bank Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase of consideration alongwith a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.
Q.5. Can such property be sold without the permission of Reserve Bank ?
Ans. Yes. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian Origin, funds towards the purchase consideration should either be remitted to India or paid out of balance in NRE/FCNR account.
Q.6. Can Sale proceeds of such property if and when sold be remitted out of India ?
Ans. In respect of residential properties purchased on or after 25th May, 1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May 1993 will have to be credited to the ordinary non-resident rupee account of the owner of the property.
Q.7. Are any condition required to be fulfilled if repatriation of sale proceeds is desired ?
Ans. Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.
Q.8. What is the procedure for seeking such repatriation ?
Ans. Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank Mumbai within 90 days of the sale of the property.
Q.9. Can foreign citizens of Indian Origin acquire or dispose of residential property by way of gift ?
Ans. Yes. Reserve Bank has granted general permission to foreign citizens of Indian Origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian Origin whether resident in India or not, provided gift tax has been paid.
Q.10. Can foreign citizens of Indian Origin acquire commercial properties in India ?
Ans. Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian Origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers’ NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days form the date of purchase of the property/final payment of purchase consideration.

Stamp duty setback allowed
By Vimal Punmiya, Chartered Accountant

Important amendment with regard to factual position under the Bombay Stamp Act, 1958 relating to the provisions of investment : -

By virtue of ordinance no. Mah. Ord. II of 2005 dated 7th May 2005 wherein, a new article is introduced namely 5(g-d) (ii) :-

“(ii) if relating to the purchase of one or more units in any scheme or project by an investor from a developer Same duty as is leviable on conveyance under clause (a), (b), (c), or (d), as the case may be of Article 25 on the market value of the unit”

For the purpose of this clause, the investments in the unit shall include a flat, apartment, tenement, block or any other unit by whatever name called, as approved by the Competent Authority in the building plan.

By virtue of above amendment in the said Article, the purchase would get a set off of Stamp Duty to the extent of the amount of Stamp Duty paid by the seller, on the second document of conveyance made by the purchaser and if no duty is required to be paid, then the minimum duty for the conveyance shall be Rs. 1,000/-. The said amendment can be explained with the help of an illustration which is as under :-

1) Mr. A who purchased a Flat for Rs. Lacs whereby, Stamp Duty paid by Mr. A on the consideration of Rs. Lacs was Rs. 33,750/- as per the rates applicable under the Bombay Stamp Act, on conveyance of the said flat within three years, when Mr. B purchases said flat for Rs. 112 Lacs consideration then Stamp duty payable by Mr. B on 11 lacs consideration would be Rs. 38,750/- but, Mr. B would be liable to pay only Rs. 5,000/- as he would get a set off of Rs. 33,750/- which is duly paid by Mr. A initially on the Agreement duly entered by him/.

However, alternatively if Mr. A, sells the said flat to Mr. B, for Rs. 10 Lac only then, although the Stamp duty of Rs. 33,750/- has already been paid by Mr. A, then, on the second transaction, Mr. B would be liable to pay only Rs. 1,000/- as the consideration involved is same.

Registration
This type of mortgage and the letter evidencing the deposit of title deeds in the nature of a forwarding letter or acknowledgement does not attract stamp duty and registration (See. 59 of TP Act). However, certain states like Maharashtra, Gujarat stipulate that even the mere deposit of title deeds with forwarding acknowledgement letter needs stamping and registration.
If the terms of the contract or the deposit of title deeds are reduced to writing such mortgage in Karnataka attract stamp duty at 1% on every Rs.5000/- that is Rs.50/- with a maximum of Rs.50,000/- Registration charges are 0.5 % with a maximum of Rs.10,000/-
Urban co-operative banks have concession of 50% on stamp duty id registration fee. This type of mortgage is popular, as it is easier, quicker, less expensive not subject to stamp duty and registration formalities except in few states and there will not be undue publicity ie concession available to urban co-operative banks if extended to all inks may help many borrowers. The remedies available to the creditor under. this type of mortgage are
l Personal Decree Against the Mortgagor
l Right to sale with the intervention of the Court
l Right to appoint a Receiver with the intervention of the Court.
l Right to take possession with the intervention of the Court.

Limitation available is 13 years under Article 62 of the Limitation Act 1963. When the mortgage is created by a limited company over its property such mortgage must be registered with the registrar of companies within 30 days of its creation irrespective of the type of mortgage.
Right of Mortgagor (Sec 60 of TP Act)
Mortgagor after fulfilling his part of the Contract, that is by paying e money secured, may require the mortgagee to deliver the mortgage deed and all documents relating to the mortgaged property. If the mortgagee is in a position to deliver back the possession and execute required document and at the cost of the mortgagee.
This right of the mortgagor is called Redemption of Mortgage.
However, such right of redemption can be invoked before the mortgagee files a suit for enforcement of mortgage.
Limitation period available is 30 years from the date on which the mortgagor performs his part of the contract, paying the money secured. Article 61 (a) of the limitation Act, 1963.

Aftermath of land scam in Borivali, Sub-registrars have been divided into seven counters. The Stamp Duty have to be paid after adjudication only. No documents are registreared by the authorities for want of transparent process.

In other 5 zonal offices, now token are given from the website of Stamp Duty and Registration. On phone adjudication is closed as of now.

The Madras High Court has held that an instrument, whether a certificate of sale or sale deed, issued in a public auction of properties, was chargeable with stamp duty under Article 18 read with Article 23 of Schedule I to the Indian Stamp Act, 1899.
In an elaborate 48-page judgement on an application filed by the Official Liquidator, High Court, seeking general directions, Mr Justice V. Ramasubramanian ruled that while the Official Liquidator could leave the choice to the auction purchaser to choose the title to or nomenclature of the document, neither he nor the purchaser had any choice with regard to the liability to pay stamp duty.

Noting that there was an emerging trend among purchasers of properties in public auctions to seek issue of ‘Certificates of Sale’ rather than ‘Deeds of Sale’, the Judge recalled that in Shree Vijayalakshmi Charitable Trust case [Shree Vijayalakshmi Charitable Trust vs Sub-Registrar, Erode Dt (2009 (5) CTC 15], the view that a certificate of sale did not attract stamp duty had found acceptance.

But the question as to whether stamp duty was payable on a certificate of sale was not examined in the said case on a comparative analysis of all provisions of the Transfer of Property Act, 1882, the Stamp Duty Act and the Registration Act, 1908, and issues of repugnancy and the overriding effect of one Act over the other, the Judge said. Analysing the Transfer of Property Act, the Judge recalled that the Apex Court made it clear in Raghunath vs Kedar Nath [1969 (1) SCC 497] that the documents of which registration was necessary, fell within the scope of Section 49 of the Registration Act and that if not registered, they were not admissible as evidence of any transaction affecting any immovable property comprised therein.

Under the Stamp Act, the Judge said, irrespective of and de hors provisions of the Registration Act, a certificate of sale issued to a purchaser of property sold in public auction, was required to be stamped as per Article 18 read with Article 23 if the purchase money exceeded Rs 50 of Schedule I of the Stamp Act. The provisions of the Stamp Act and the Registration Act operated on parallel lines. Neither of them contains a non-abstante clause so as to exclude operation of the other. Therefore, the option given under the Registration Act to makers of certain documents, to register them or not, was not to be construed as an exemption from payment of stamp duty.

Therefore, the only conclusion that could be drawn by a combined reading of the three Acts was that by whatever name the instrument was called, it was chargeable with stamp duty, the judge held.

In view of the above, the application was disposed of with a direction to the Official Liquidator to issue a certificate of sale or execute a sale deed in line with the choice of the auction purchaser.

Courtsey : Taxguru

By Accommodation Times Bureau
By Samir Sanghavi Chartered Accountant
Proposed Increase in Stamp Duty on Leave and License Agreements – Amendment to Article 36A of Schedule I to the Bombay Stamps Act, 1958 (“the Act”)
Leave and license agreements are charged under Article 36A of Schedule I to the Act. With a view to mobilize revenue, the Maharashtra Government had put forward a proposed hike in stamp duty with respect to leave and license agreements for residential and commercial properties. Some of the relevant provisions which would have been likely to be affected if the provisions were to come into force are as under:

Illustration:
(1) An individual taking a flat having market value of Rs.4,00,00,000/- (Rupees Four Crore Only) on leave and licence basis for 36 months will have to pay stamp duty of Rs.40,000/- (Rupees Forty Thousand Only).
(2) A top Indian corporate wishing to enter into a leave and license agreement for commercial premises on a property having market value of Rs.2,00,00,000/-(Rupees Two Crore Only) for a period of 60 months in Lower Parel will have to pay stamp duty of Rs. 80,000/- (Rupees Eighty Thousand Only).
However, due to several objections received to the above proposal, the Chief Minister’s office and the revenue department have deferred the decision to hike the stamp duty for the time being.

By Accommodation Times Bureau

New Delhi: The apex court has ruled that, “the state can fix higher stamp duty on property transactions done through power of attorney vested in an outsider, as against such power executed through one’s blood relatives like father, mother and wife.”
The bench of justices comprising R M Lodha and H L Gokhale said such classification cannot be termed as unconstitutional as the government can adopt differential stamp duties to check evasion and sale transactions resorted through and for extraneous considerations.
The apex bench has maintained the appeal filed by the Madhya Pradesh Govt. challenging the state high court’s decision to quash Clause(d), Article 45 of Schedule 1-A of the Indian Stamp Act, 1899 which was brought in by the Indian Stamp (Madhya Pradesh Amendment) Act, 2002 Act) as unconstitutional being violative of Article 14 (equality clause) of the Constitution of India.
Following to hike in stamp duty when asked to realtors they said, “The hike in property tax and stamp duty at this juncture is definitely going to negatively affect both the property selling and rental market. At current price levels, combined with high interest rates and slower economic growth, people will find this increase as further squeeze on their home buying budget. The same factors might lead to property owners reducing the rentals on their property to absorb a bit of the hike in the stamp duty on leave and license agreements. The increase in both property taxes and stamp duty tends to shift the market favourably towards the leave and license sector. In this case neither has been spared, so people will opt for the lesser pinching of the two, i.e. they will opt for more leave and license transactions,” Mr. Prashant Maharaj, CEO, Property Partners said.

Accommodation Times News Service

Q. 1. What is the Bombay stamp Act,1958?
The Bombay Stamp Act, 1958 comes into force on 16th February, 1959 and is applicable in the State of Maharashtra. This Act is intended to levy Stamp duty on certain types of documents executed in the State or brought from outside for acting upon the same in the State. The various instruments/documents are broadly covered under different 62 articles listed in Schedule-I appended to the Act. The rates at which stamp duty is levied on these documents are mentioned in Schedule ?I. The Bombay Stamp Act, levies Stamp duty on documents/instruments by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. The stamp duty is payable on instrument and not on the transactions.

Q. 2. What is Stamp Duty ?
It is a type of tax which is paid for the transaction performed by way of document or instrument under the provisions of Bombay Stamp Act, 1958 and Indian Stamp Act, 1899.

Q. 3. Whether Stamp duty is payable on transactions or on instruments?
It is payable on instruments and not on transactions. The definition of the term instrument is very wide.

Q. 4. What is instrument ?
Instrument means any document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded.

Q. 5. What is document ?
As defined in Evidence Act, document means only matter expressed or described upon substance by means of letters, figures or marks or by more than any of those means intended to be used or which may used for the purpose of recording that matter.

Q. 6. Why Stamp Duty has to paid on document/instrument ?
The payment of proper Stamp duty on instruments bestows legality on them. Such instruments get evidentiary value and are admitted in evidence in Court of law. The instruments which are not properly stamped are not admitted in evidence .

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Q. 7. Which provisions/ Articles of Indian Stamp Act, 1899 attracts Stamp duty in the state of Maharashtra ?
The following Articles of The Indian Stamp Act, 1899 attract Stamp duty in the state of Maharashtra

Article No. Description of instrument.
13 Bill of Exchange
14 Bill of Lading-
27 Debenture
37 Letter of Credit
47 Policy of Insurance
49 Promissory Note
52 Proxy
53 Receipt
62 Transfer
Q. 8. What is meant by execution of instruments?
Execution means putting signatures on the instruments by the person/persons executing the instruments.

Q. 9. How Stamp Duty is calculated.?
Broadly the 62 articles of Schedule I are grouped in three categories.
Category i) Articles whose amount of Stamp duty is fixed irrespective of the value mentioned in the document / instrument. ( Viz. Administration Bond, Adoption deed, Affidavit, Divorce, Appointment in execution of power , Apprenticeship deed, Article of clerkship, Award, Cancellation deed, Charter party, Duplicate, Copy of Extracts, Entry of Memorandum of Marriage, Indemnity Bond, Letter of license, Memorandum of Association of a company, Notarial Act, Power of attorney, etc.)

Category ii) Articles where depending upon the value mentioned in the document, the amount of stamp duty is varied. (Viz. Agreement relating to deposit of title deeds, pawn, pledge or hypothecation, Clearance List, Lease , Article of association, Mortgage deed, Security Bond, etc.)

Category iii) Articles which attracts Stamp duty on the consideration mentioned in the document or True Market Value, whichever is higher. ( Viz. Conveyance, Agreement for sale, Gift, Exchange,Partnership Deed,Partition, Development Agreement, Transfer, Trust, etc.)

For category I and II types of instruments the Stamp duty payable can be ascertained by referring to the Schedule I; but to ascertain the Stamp duty on the instruments mentioned in Category III, the expertise in valuation is required. The True Market Value is determined as per the provision of the Bombay Stamp ( Determination of True market value of the property ) Rules, 1995.

Q. 10. What point of time of Stamp Duty payable. ?
The Section 17 & 18 of the Act states the time of payment stamp duty. Generally all the instruments executed in the state shall be stamped before or at the time of execution or immediately thereafter or on the next working day following the day of execution. Similarly, the instruments which is executed out of the state and within three months from its receipt in the state, shall be stamped.

Q. 11. How is Stamp Duty payable?
Stamp Duty can be paid by
1. Using Stamp paper
2. Using adhesive stamps
3. Franking

Q. 12. Who is liable to pay Stamp Duty ?
As per the provisions of Section 30 the onus of payment of Stamp duty in the absence of an agreement to the contrary, shall be borne by the executing in the manner provided their with respect of certain kinds of documents viz. Mortgage deed, release, security bond, settlement, bond etc. in the case of conveyance, the grantee and lease the lessee shall pay the stamp duty in the case of exchange of property, both the parties in equal share shall pay stamp duty. In case of partition, the parties thereto in proportion to their respective shares should pay stamp duty.

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Q. 13. What is meant by adjudication of instruments? Which authority is to be approached for adjudication of instruments ? What is the amount of fees required to be paid for adjudication? What documents are to be enclosed while submitting application for adjudication ?
Section 31, of Bombay Stamp Act, 1958 deals with the adjudication of the instruments. Adjudication means determining the chargeability of stamps duty on instruments. The authority to be approached is the Collector of Stamps appointed in each District. Application for adjudication should be accompanied by ? true copy or an abstract of the instrument and also with such affidavit or other evidence as may be necessary to prove that all facts affecting the chargeability of the instrument have been truly setforth in the instrument along with the proof of payment of Rs. 50/- as adjudication fee. Adjudication can be done both for signed as well as unsigned documents.

Q. 14. How to pay Stamp Duty ?
The Document which is chargeable with Stamp duty can be prepared on the non-judicial Stamp paper of appropriate value. Unexecuted document can be got franked with special adhesive Stamps by Franking Machine intended for stamping such documents, by tendering required amount in the office of collector of Stamps whereever this facility is available. When documents is lodged for adjudication, on receiving intimation as to the amount of Stamp duty payable by tendering appropriate amount equal to the amount of Stamp duty and penalty if any, the Collector of Stamp shall certify the document as to the payment of proper duty.

Q. 15. What is the validity of Stamps ?
As per the provisions of Section 52-B, the stamps which are purchased and not used within six months shall be rendered invalid thereafter. The stamps purchased and not used for intended purpose are entitled for refund after deduction of certain charges, if lodged for refund within six months from the date of purchase and on fulfilling the conditions stipulated in Chapter V of the Bombay Stamp Act, 1958.

Q. 16. What are the consequences of not paying Stamp duty?
The documents if not duly stamped, shall not be admissible in evidence in the court of law. As per the provision of Section 59, any person who, with the intention to evade the Stamp duty, executes or signs any instruments chargeable with stamp duty, without the same being duly stamped, shall on conviction, be punished with rigorous imprisonment for ? term which shall not be less than one month but which may be extended upto six months and fine upto Rs. Five Thousand. The Section 67 and 68 empowers the authorities to enter upon any premises and to inspect and impound/seize the documents which are not duly stamped and burden is casted upon every public officer to assist the authorities in detection of evasion. The documents impounded for want of proper duty, attracts penalty @ 2 % per month from the date of execution of such document.Miscellaneous

Q. 17. In whose name the stamps are required to be purchased ?
The stamps are required to be purchased in the name of one of executors to the instrument.

Q. 18. What happens if the instrument is executed on stamps which does not bear the name of one of the executors.?
Such instruments are not admitted in evidence, for any purpose. These instruments are also treated as not properly stamped. These instruments are liable to be impounded and sent to the Collector of Stamps for recovery of proper stamp duty.

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Q. 19. What are the rates of Stamp duty on instruments relating to transfer of immovable property.
The rates of stamp duty on instruments relating to transfer of immovable property vary from place to place. The rates are specified in Article 25 of Schedule 1 appended to the Bombay Stamp Act, 1958. However, Article 25(d) which deals with the instruments of transfer of residential premises in ? Co-operative Housing Society or where the provisions of Maharashtra Ownership Flats Act 1963 and the Maharashtra Apartment Ownership Act, 1970 apply, provides for levy of concessional rates of Stamp duty. In areas, where the provisions of the aforesaid Acts apply, residential premises upto ? market value of Rs. 1,00,000/- attract such concessional rates. Instruments relating to the transfer of residential premises of market value of more than Rs. 1,00,000/- attract normal rates of stamp duty for values over and above Rs. 1,00,000/- as applicable in that area. Such normal rates are 8 %, 6%, 3 %, 5 %. Etc. depending on where the property is situated.

Q. 20. Whether any penalty is levied in cases referred to the Collector by the Sub-Registrar for determination of true market value of the property where the Collector comes to the conclusion that the true market value of the property was not stated in the instrument ?
In addition to recovery of deficit Stamp duty in such cases, the concerned party is required to pay penalty of Rs. 250/- plus 15 % interest for each year or part of the year on the deficit amount from the date of presentation of instrument before the Sub-Registrar.

Q. 21. What remedy is available to the parties, in case they do not agree with the true market value of the property as determined by Collector of the District ?
The parties can go in appeal to the Chief Controlling Revenue Authority, Maharashtra State, Pune. under section 32 B of Bombay Stamp Act, 1958.

Q. 22. Is the chargeability of stamp duty determined by the Collector of stamps in adjudication final ? Can ? person go in an appeal against the order passed by the Collector of Stamps ? Is there any time limit for filing the appeal ?
The chargeability of stamp duty on the instrument as determined by the Collector of Stamps is not final. The person affected by the order of the Collector of Stamps can go in appeal to the Chief Controlling Revenue Authority, Maharashtra State, Pune as provided in section 53 of the Bombay Stamp Act, 1958, limit prescribed for the filing of an appeal is within 60 days.

Q. 23. Why do the authorities insist on disclosure of relevant facts and circumstances to be fully and truly set forth in the instrument ?
Section 28 of the Bombay Stamp Act, 1958 casts the duty on the executants to disclose and truly set forth relevant facts and circumstances in the instruments. This helps in finding out the types of transactions involved in the instruments which in turn helps in the determination of proper stamp duty payable on such instruments. Duty is not payable on the title or the heading given on the top of the instrument but on the recitals as stated in the instruments.

Q. 24. Can there be refund of Stamp duty in case if the Stamp paper is unused or multiliated?
Yes, Refund can be claimed v/s 47 of The Bombay Stamp Act 1958. However such claim can be made to the collector of Stampswithin a period of 6 months from the date of purchase of Stamps

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Q. 25. What is meant by impounding of instruments ?
Every person having by law or consent of parties authority to receive evidence and every person in charge of ? public office before whom any instrument chargeable with stamp duty is produced or comes in the performance of his functions. Shall if it appears to him that instrument is not duly stamped, impound the same, irrespective whether the instrument is not valid in law. Such impounded document is required to be forwarded to the Collector of Stamps for recovery of deficit stamp duty in addition to penalty at the rate of 2 % per month .

Q. 26. As the cost of flat is required to be paid in installment as per agreement whether the stamp duty can be recovered in part at the time of payment of such installments instead of making full payment at the time of entering into the agreement ?
No. Stamp duty cannot be paid in settlements, Various chambers Associations have made suggestions and representations to the stamp authorities in this regard. However till date no effort is made by the Stamp authorities towards implementation of the same.

Q. 27. In case where the builder sells ? flat to an individual in ? building where the society is not formed and the document is not stamped and the individual resells the flat to another persons who pays the stamp duty. The builder confirms the said agreement and thereafter the society is formed. The purchaser becomes ? member of ? society. Whether the original purchaser in future will be liable to pay stamp duty and whether stamp duty can be charged on the flat and whether the first purchaser can be forced to pay the stamp duty by the Government or it will be have to be borne by the second purchaser again who is the present owner of the flat. ?
The original purchaser will be liable to pay stamp duty on the fair market value prevalent at the date of the document as determined by the Stamp authorities as stamp duty is paid on each transaction. However, the reply is subject to the confirmation of the Hon?ble Supreme court of India. In the question under consideration in my opinion person is responsible to pay stamp duty on only his own purchase transaction and hence the second purchase in my opinion will not be liable to pay the unpaid stamp duty of the first purchaser.

Q. 28. On what basis ( Carpet, Built-up or Super built-up ) are the rates fixed by the stamp authorities ?
For the purpose of determination of True Market Value, the Built-up area is taken into account.

Q. 29. Will stamp duty have to be paid if there is a ?deed of family settlement and a flat is transferred amongst family members ?
Yes. As per the provisions of Bombay Stamp Act, Stamp duty will have to be paid on a deed of family settlement.

Q. 30. Will stamp duty have to be paid if the flat is gifted by a donor ?
Yes. Stamp duty will have to be paid if the flat is gifted by the donor.

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Q. 31. Is the decree of final order of a civil court by which immovable property is transferred be liable to be stamped as a conveyance ?
Yes, After the amendment of Article 25 of the Bombay Stamp Act. The definition of conveyance has been widened, in view of the amendment decree or final order of the court by which immovable property is transferred is liable to be stamped as a conveyance.

Q. 32. In case of resale of the flat who has to pay the Stamp duty, the purchaser or the seller ?
The parties can themselves decide who shall pay the stamp duty. If nothing is mentioned in the agreement then as per section 30 of the Bombay Stamp Act, 1958 if the transaction relates to resale of flats then the stamp duty will have to be paid by the purchase.

Q. 33. Are orders made by the High court under section 394 of the Companies Act, 1956 in respect of amalgamation of companies be liable for payment of stamp duty as on a Conveyance ?
Yes, after the amendment made in 1993, the preview of Article 25(d) has been widened so as to bring orders made by the High Court under section 394 of the Companies Act, 1956. In respect of amalgamation of companies. Therefore stamp duty as on a Conveyance will have to be paid on such orders.

Q. 34. In whose name should the stamp paper be purchased. ? Can the client execute the document on ? stamp paper purchased by an Advocate ?
As per section 34 of the Bombay Stamp Act, 1958 the stamp papers should be in the name of one of the parties who has signed the documents. Therefore the stamp paper should be purchased in the name of one of the parties who would be signing the instruments. If the stamp paper has been purchased in the name of an Advocate, C.A., etc than such instrument shall be treated as an instrument not duly stamped and shall be inadmissible in evidence.

Q. 35. What are the different types of documents?
As of today there are 62 kinds of documents each one signifying a separate kind of deed. These are as follows: (numbers in italics indicate the serial no. of support documents required from the support document list furnished below; absence of number indicates that no support documents are required).

1. Acknowledgement
2. Administration Bond
3. Adoption Deed
4. Affidavit
5. Memorandum of an Agreement.
6. Agreement relating to deposit of Title deeds, pawn, pledge or hypothecation
7. Appointment in execution of power
8. Appriasal or Valuation
9. Apprenticeship Deed
10. Articles of Association of a company
11. Articles of clerkship
12. Award
13. Bond
14. Bottomory Bond
15. Cancellation
16. Certificate of sale
17. Certificate or other document
18. Charter Party
19. Clearance List (purchase or sale of Government Securities)
20. Clearance List (purchase or sale of cotton)
21. Clearance List (purchase or sale of bullion)
22. Clearance List (purchase or sale of oil seeds)
23. Clearance List (purchase or sale of yarn)
24. Composition Deed
25. Conveyance ( 1,2,3,4,5,6)
26. Copy or Extract
27. Counterpart or Duplicate
28. Customs Bond or Excise Bond.
29. Delivery Order
30. Divorce
31. Entry or memorandum of marriage.
32. Exchange of property (1,2,3,4,5,6)
33. Further charge
34. Gift (1,2,3,4,5,6)
35. Indemnity Bond
36. Lease (1,2,3,4,5,6)
37. Letter of allotment of shares
38. Letter of license
39. Memorandum of association of a company
40. Mortgage Deed (1,2,3,5,6)
41. Mortgage of crop
42. Notarial Act
43. Note or Memorandum
44. Note of protest by master of ship
45. Order for the payment of money
46. Partition (4,5,6)
47. Partnership
48. Power of Attorney
49. Protest of Bill or Note
50. Protest of the master of ship
51. Reconveyance of mortgaged property
52. Release (1,2,3,4,5,6)
53. Respondentia Bond
54. Security Bond or Mortgage Deed (1,2,3,5,6)
55. Settlement (1,2,3,4,5,6)
56. Share Warrants
57. Shipping Order
58. Surrender of Lease (1,2,3,4,5,6)
59. Transfer (1,2,3,4,5,6)
60. Transfer of Lease (1,2,3,4,5,6)
61. Trust (1,2,3,4,5,6)
62. Warrant of goods.
Documents can also be classified as Testamentary and Non Testamentary depending upon the time when they come into force. E.g. Will is of testamentary type because it doesn?t come into force immediately whereas a sale deed is a non-testamentary document since it has immediate effect.On the same lines, some documents have to be compulsorily registered e.g. a sale or lease deed while registration for some is optional e.g. affidavit.

Q. 36. What are the different support documents generally required to be submitted for registration?
For registration purpose, some of the above documents should be accompanied by one or more support documents. The list of support documents is as follows:
1. Income Tax clearance certificate under 230 A-1 (ITC) Act 1961.
2. Income Tax certificate 269 UL (37I) Act 1961.
3. Permission under Urban Land Ceiling Act 1976 , section 26.
4. Bombay Stamp Act 1958, section 32 A.
5. Bombay Stamp Act 1958, section 33.
6. Registration Act 1908 sections 25 and 34.

Adjudication of Proper Stamp Duty
By M.K. Gokhale, Deputy Supt. Of Stamps (Retd.)
Section 31 of the Bombay Stamp Act, 1958 provides about the adjudication of proper Stamp Duty. The applicant under this section has to submit an instrument executed or unexecuted and previously stamped or not for the purpose of opinion to the collector of stamps and for this purpose, the applicant has to pay a fee of Rs. 50/-. On receipt of the application of adjudication and the instrument, the collector has to form his opinion as regards its chargeablity and then express his opinion to the applicant. Sub Section (4) of Section 32 of the Act proves that when the instrument is brought to the collector for adjudication within one month from the date of its execution, the person liable to pay stamp duty within 60 days form the date of service of the notice of demand in respect of the stamp duty adjudicated by the collector. If the applicant failed to pay the said stamp duty within the stipulated period of 60 days, the person is liable to pay a penalty at the rate of two percent per month or part thereof, from the date of execution of such instrument.
It is therefore necessary to pay stamp duty within 60 days from the date of the demand notice served by the collector to avoid levy of penalty.
In view of the penal provision in sub-section (4) of section 32 of the Act, the applicant should take care to submit the unexcelled document for adjudication under section 31 of the Bombay Stamp Act, 1958. In case of unexecuted instrument the collector has no power to levy penalty and if the applicant does not agree with the determination of Stamp Duty, he can withdraw his document from adjudication.

National Co-op. Hsg. Fed. Conference moots exemption of stamp duty and registration fee
By A.T. Bureau
The 19th Conference of the Chief Executive of apex Co-operative Housing Federation, organised by the National Co-operative Housing Federation of India on 20th May 2000, at Kochi, urged the State governments to (I) exempt housing co-operative from payment of stamp duty and registration fee (ii) contributed liberally towards the share capital of their respective apex. Federations so as to strengthen their financial base thereby enabling them to raise their borrowing power and (iii) allot 30% of the acquired land for housing purpose to housing co-operatives.
The following are some of the recommendations made by the conference.
* The LIC, NHB and HUDCO should be allocated more funds to housing co-operatives in order to enable them to meet the targets smooth under the two million housing programme
* The National Housing Bank should reduce its rate of interest from 12.0% to 11%.
* The NHB should contribute towards share capital of apex Federations to raise refinance upto 12 times of their net owned funds.
HUDCO should provide loans to apex federations on the basis of security of floating charge. It should not charge processing fee and front end fee from apex federations. It should reduce interest rate by 1% on block loans to apex Federations.
* The State Governments, which have so far, not constituted special committees on housing co-operatives in their respective States, should be requested to do so immediately. The conference was presided over by Shri S.N. Sharma, Chairman NCHF, who is a Minister in the Madhya Pradesh Ministry.
In his speech, Shri Sharma said that in line with the National Agenda, a two million housing programme has been launched since 1998-1999 under which, the Union government has fixed a target for co-operative sector to build one million houses each year predominantly for weaker sections and low income groups in the country. He informed the conference that during the year 1998-99 housing co-operatives completed the construction of about 17,000 units in urban areas with the loan assistance received from the apex federations. He proudly mentioned that the progress made by co-operatives during 1998-99 was well appreciated by the Government of India.
* Shri Sharma advocated for the Policy Support to housing co-operatives as envisaged in the National Housing and Habitant Policy in order to achieve the targets for house construction smoothly and efficiently besides adequate flow of funds from LIC, NHB and HUDCO allocation of 30% of land acquired for housing purpose by State Government exemption from payment of stamp duty and registration fee, proper legal frame work and liberal contribution in the share capital of apex Federations by State Governments.
Shri Sharma also said that the separate model law on Housing co-operatives, prepared in association with NCHF, was still under the consideration of the government of India. Efforts were being made to set it finalised early so as to provide proper legal frame work to housing co-operatives for their smooth functioning. He pointed out that funds raised by apex Federations from funding agencies had become expensive to members of housing cooperatives compared to the prevalent interest rate on housing finance offered by other agencies. In this connection, he referred to the interest rates offered by the LIC and NHB, which were still on higher side.
Registration fee & stamp duty payers association’s stand only Leave & Licence
By A.T. Bureau
As per Section 55 of The Maharashtra Rent Control Act, 1999 Registration of Leave and Licence Agreement has been made compulsory with effect form 31/03/2000. The Registration Fee and Stamp Duty Payers association along with various property related associations had filed their objection for the stamp duty on refundable deposits as well as levy of Stamp Duty on Leave and Licence Agreement Representatives of the Association had met the Honourable Chief Minister Shri Vilasrao Deshmukh, the Honorable Revenue Minister Shri Ashok Shaven as well as the Senior Officers at Mantralaya. The difficulties being faced by the stamp duty payers were brought to the 2000/2120/CR/592/M-I has been issued stating that a token registration fee of Rs. 1,000/- would be levied on Leave and Licence Agreement if the property is situated in Municipal Corporation limits and of Rs. 500/- if the property is situated in the other areas irrespective of the deposits, type of the premises or size of the premises. According to the verbal information receive from the authorities Leave and Licence Agreement has to be stamped on Rs. 20/-. However no mention is made about levy of stamp duty in the abovesaid Notification. This could give power to the authorities to interpret the documents as that of Lease. It is the belief of the Association that Professionals would advise their clients to draft agreements of Leave and Licence with renewal clauses rather than drafting lease agreements so that the tax payers can save money on payment of stamp duty. The Government could loose crores of rupees because of drafting error. This is on our opinion is a legal loopholes which will have to be plugged by the authorities.
The above Notification dated 8/6/2000 proposes to levy Registration Fee of Rs. 1,000/- or Rs. 500/- depending on the place where the property is situated from the date of publication of the Gazette. The Maharashtra Rent Control Act, 2000 has come into effect from 31st March, 2000 and all those persons who have executed the documents between 31/3/2000 & 8/6/2000 could unnecessarily be penalized. This definitely had not been intention of the Government.
With the registration of Leave and Licence being made compulsory it would not be surprising that the cash stripped Municipal Corporations would collect information about Leave and Licence Agreements and start issuing notices for levy of higher property tax to the owners of property which have been given on Leave and Licence. The Licensor has to pay not only excess property tax, but also society non-occupancy charges as well as income tax on the income.
The Association appreciate the steps taken by the Revenue Authorities of charging less amount as Registration Fees as well as willingness to accept the practical suggestions being made by the various property related associations with regards to Leave and Licence Agreement. However a written clarification from the Revenue Department stating that the stamp duty of Rs. 20/- only will be levied on Leave and Licence Agreement will be of immense help in clarifying the above said issue.
The Registration Fee and Stamp Duty Payers Association is thankful to the media for expressing the views of the members of the public particularly the Real Estate Community as regards levy of Stamp duty on Leave and Licence Agreement.
PAYMENT OF STAMP DUTY
By A.T. Bureau
The Registration Fee and Stamp Duty Payers Association has brought to the notice of the Honourable Minister for Revenue as well as the Inspector General of Registration that as of date franking facilities are available to the residents of the Mumbai at Town Hall, Shaheed Bhagat Singh Road, Near Reserve Bank of India, Mumbai – 400023 and at MMRDA Building, Bandra Kurla Complex, Bandra (East), Mumbai – 400051. It has been the suggestion of the Association that franking facilities should be available at the central Suburbs also. In this connection, the Association has also pointed out that as of date, franking facilities are available at the Central Suburbs also. In this connection, the Association has also pointed out that as of date, franking facilities are available at only two places i.e. Mumbai City and in Western Suburb. No facility for payment of Stamp Duty within a few kilometers distance is available to the lakhs of residents between Dadar to Mulund and Wadala to Mankhurd. As a result of the same, huge amount of cash to be carried out by the members residing in the Central Suburbs.
The Association has been given to understand that having regards to the practical difficulties faced by the residents of the Central Suburbs, the authorities are considering installation of franking machine at Ground floor at the Chembur office in the month of April 2000. The address of the Sub Registrars Office is Ground floor, New Administrative Building, Phase II, Ramkrishna Chemburkar Marg, Near Chembur Fine Arts Hall, Chembur (East), Mumbai – 400071. When the franking facilities would start at Chembur, it would be a big relief to the Stamp Duty Payers at Central Suburbs.
The Association also requests the authorities to accept the cash at all the office upto a sum of Rs. 50,000/-. At present only cash upto Rs 25,000/- is accepted by the authorities. The Association also requests the authorities that they should deliver the franked documents on the same day to the parties so that they should deliver the franked documents on the same day to the parties so that the mental related transactions, the parties executed the documents only after the proper stamp duty has been paid on the documents.
The Association had through its press release in 1999 requested the authorities that the map of various places in Maharashtra as well as the market value of various localities of Maharashtra should be available to the common man through the medium of internet. The Association is given to understand that the website with the market value of property will be available on the Internet very shortly.
The Association further states that on account of the recent amendments to the Rent Act all transactions relating to rental premises will have to be compulsorily registered. This will increase the pressure of work at the Sub Registrars for the city of Mumbai. It is not surprising to find that because of heavy work load a lot of pressure is there on the Sub-Registrars. At times, one has to spend more than five hours just to register a document. Also the precious time of the Tax payers is wasted in complying with the bureaucratic formalities. The stamp duty rates for transfer of tenancy as per Article 5 (g-d) of the Bombay Stamp Act 1958 are the same for all the areas of the city of Mumbai which is Rs. 1,000 per sq.metre for commercial premises and Rs. 100/- per sq.metre for residential premises. There is a wide-up gap in the prevailing prices at Nariman Point, Peddar Road, Govandi & Charkop. Yet from the stamp duty point of view on transfer of tenancy the stamp duty liability is the same. The Association herewith requests the newly appointed Inspector General of Registration Shri Bhoge to reduce the hardships of the common man and take pragmatic steps to simplify the Bombay Stamp Act 1958 and appoint more staff at the Sub Registrars Office to reduce the hardships of the tax payers.
Stamp Duty on Leave & License Agreement
By Bankimchandra Khona, Solicitor
Under Section 55 of The Maharashtra Rent Control Act, 1999, now even an Agreement for Leave & Licence needs to be registered. Therefore, the question of payment of stamp duty on Leave and Licence Agreement arises. There is no specific provision made for payment of stamp duty on Leave & Licence Agreement under Schedule I of the Bombay Stamp Act, 1958. Hence the stamp duty of Rs.20/- becomes payable under Article 5(h) of Schedule I of Bombay Stamp Act.
 2. It has been stated that Stamp Authority / Registration Authority proposes to levy stamp duty by treating a Leave & Licence Agreement as a Lease and to levy stamp duty as per Article 36 of Schedule I of the Bombay Stamp Act. Article 36 of Schedule I of Bombay Stamp Act is with regard to the stamp duty payable on a lease. There is no mention therein whatsoever about a Leave & Licence Agreement.
3. Can Stamp and Registration Authorities equate Leave & Licence with a Lease ? Can the Authorities, therefore, insist on levying stamp duty on a Leave & Licence Agreement not Rs.20/- but as per Article 36 depending upon the period of the Licence ? There will be a vast difference in payment of stamp duty as per Article 36 of Schedule I of the Bombay Stamp Act and as per Article 5 (h).
4. It is respectfully submitted that the Leave & Licence and Lease / Tenancy Agreement are two entirely different kinds of document which have different legal implications and effect.
5. The Lease is defined u/s. 105 of the Transfer of Property Act, which reads as under :-
“105. Lease defined.- A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
6. A Licence is defined u/s. 52 of the Indian Easements Act, 1882. The said Section 52 reads as under :
“Where one person grants to another, or to a definite number of other persons, right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right be unlawful and such right does not amount to an easement or an interest in property, the right is called Licence”.
 
Lease and Licence are defined under two different statutes.
 
7. The essential distinction between a Lease and a Licence is that in a Lease, there is transfer of interest in the property while in the case of licence, there is no such transfer although the Licensee acquires only a personal right to occupy the property. This principle has been confirmed by number of High Courts and Supreme Court judgements (AIR 1968 S.C. 175 (178), AIR 1989 S.C. 1816 (1990), Second Law Report 381, etc.).
8. U/s. 56 of the Easements Act, a Licence is personal and the Licence cannot be transferred by the Licensee, whereas Lease, except in the case where Bombay Rent Act is applicable, is transferable. Under Section 108(B)(j) of the Transfer of Property Act, the Lessee is not only entitled to transfer his leasehold right but can also mortgage or sub-lease the whole or any part of his interest in the property, whereas the Licensee cannot transfer or mortgage or grant sub-license to any person. The Licensee cannot sue a stranger in his own name, whereas the Lessee is entitled to sue a stranger on his own name. The License is revocable by the Licensor under Section 60 of the Easements unless it falls within two exceptions mentioned in that Section, the Lease is not by the Lessor. The licence comes to an end when the Licensor makes an assignment of his interest in the property, whereas a lease continue to be valid and binding on the Assignee of the Lessor when the Lessor assigns and transfers his interest in the property which is called a transfer of “reversionary right”.
 
9. Now U/s. 7 of Maharashtra Rent Control Act, 1999, the licence and tenancy are separately defined. The licence is defined under the Rent Act u/s. 7(5), and the tenancy is defined u/s. 7(15) of the said Act.
10. The basic test to distinguish a Lease from Licence is the intention of the parties.
 
11. Explanation B of Section 24 the said Rent Act, states that an Agreement of Licence in writing shall be conclusive evidence of the facts stated therein. In view of Explanation (B) to Section 24, once it has been mentioned in an Agreement that same is Leave & Licence Agreement, then it is a conclusive evidence of the fact that it is a Licence and not a Lease and that intention of the parties is to have a licence and not a lease. In view of the said provision, now it is not open for anybody much less Stamp Authority to contend when Agreement is of Leave & Licence that the same is Lease. In case of licence for residential premises, Owner/Licensor is entitled and has to proceed u/s. 24 of the said Act, whereas in tenancy agreement for recovery of possession, the Lessor is entitled to initiate ejectment proceedings under Chapter IV of the Rent Act and under Section 33 of the said Act has to file a suit in the Court of Small Causes at Mumbai .Therefore, there are two different provisions under the Rent Act in respect of the recovery of possession by the Licensor and by the Landlord/Lessor. There are other various provisions under the Rent Act where distinction is made between the Agreement of Tenancy and the License.
12. In case of recovery of possession by the Lessor or Landlord to which provisions of said Maharashtra Rent Control Act applies, will have to file a suit for ejectment in Small
Causes Court only. Whereas in case of licence of a residential premises, the proceedings are to be taken u/s. 24 before the Competent Authority.
13. In view of Explanation B to Section 24 of the Rent Act, once the document states that it is a licence granted by the Licensor to the Licensee, it is conclusive proof that it is a licence and that it was the intention of the parties that it has to be Licence and not Lease. Such document will be covered by the Easements Act, the Licensee will not be entitled to transfer, mortgage, grant sub-licence. The licence, on the death of Licensee, will come to an end. It is submitted that in such circumstances, the licence being personal permission, it is not open for Stamp Authorities to say that even though Agreement is of Leave & Licence but it could be construed as a Lease. it is respectfully submitted that Stamp Authority in view of specific provision of Explanation 24 of Rent Act cannot treat a Licence as Lease on the ground that document is not licence but in fact it is lease.
14. The interest and right of a lessee or tenant are heritable under the Transfer of Property Act as also under the Bombay Rent Act. But the right to use premises is not heritable in case of Leave & Licence. On the death of a Licensee, his heirs will not inherit a right as a Licensee to use the premises. Therefore, considering the definition of the Lease and Licence, both are different under all relevant Acts. Both Agreements have different meanings, legal effects and consequences. It is abundantly clear that lease and/or tenancy agreement is distinct from Leave & Licence Agreement. One cannot treat a Leave & Licence Agreement as a Lease and claim stamp duty as per Article 36 of Schedule I of Bombay Stamp Act.
Stamp Duty on tenancy Agreement and
Leave & Licence Agreement
By Bankimchandra P.Khona
From 1st April, 2000 a Tenancy Agreement and a Leave & licence Agreement under section 55 of the new Rent Act are required to be in writing and registered.
Question will arise as to payment of stamp duty on such Tenancy Agreement and Leave and licence agreement First we will consider the provisions of Tenancy Agreement.
Agreement of monthly tenancy will be required to be stamped under Article 36A(I) of Schedule 1 of the Bombay Stamp Act. The stamp duty leviable shall be same as is leviable on conveyance under clauses a, b, c or d as the case may be of Article 25 for the whole amount of rent payable or the amount of average annual rent, whichever is lower. It is possible to interpret Article 36A(1) of Schedule 1 of Bombay Stamp Act in two different manner. In case of monthly tenancy, is it amount of average annual rent or is it only monthly rent required to be ascertained and on such average annual rent or monthly rent stamp duty will be payable as per the applicability of clause a,b,c,d or e of the said Article 25 of Schedule 1 of Bombay Stamp Act ? The words used in the said Article is for the whole amount of rent payable or amount of average annual rent whichever is lower. It is submitted that the monthly tenancy is for a month and continue till it is terminated. Therefore, the period of tenancy is only a month and stamp duty should be calculated on a monthly rent and not on average annual rent. In case of Mumbai, for (a) the non-residential premises and (b) the residential premises which are not part of a co-oeprative housing society building or to which Maharashtra Apartment Ownership Act, 1970 does not apply Stamp Duty is 10%. However, in case of residential premises of a building belonging to a co-operative housing society or the premises to which Maharashtra Apartment Ownership Act, 1970 applies Stamp Duty shall not be 10 per cent but as per the schedule of Stamp Duty which is lower and wherein the maximum rate is 8 per cent. In short, Article 36 of Schedule I of the Bombay Stamp Act will cover the payment of Stamp duty on monthly tenancy agreement.
It may be pointed out that under Article 36, in addition to the Rent, if any fine or premium or money is advanced or to be advanced in addition to the rent fixed, then on such fine or premium or money advanced or to be advanced, additional duty is payable as per Article 25 of Schedule I of Bombay Stamp Act, i.e. 10 per cent in case of non-residential premises and residential premises which are not within the co-operative housing society buildings or the premises to which the provisions of Maharashtra Apartment Act does not apply and in case the premises of a building of a co-oeprative housing society or to which the Apartment Act, applies, the concessional rate as state hereinbefore shall apply.
Explanation I of Article 36 provides that rent paid in advance shall be deemed to be premium or money advanced within the meaning of said Article. Therefore, any rent paid in advance will be considered as premium or money advanced and on the same, stamp duty at aforesaid rates will be required to be paid.
Explanation II of said Article further provides that if the tenants agrees to pay recurring charges such as Government revenues, the landlords’ share of municipal rates or taxes which are required to be paid by the landlord, then such amount shall also be deemed to be part of rent and naturally such rate or taxes or shares will attract stamp duty at the aforesaid rates of 10 per cent or concessional rate of depending upon the nature of the premises.
Some times the question arises as to what happens to the interest-free security deposit. Will they be considered as fine or premium ?
Will any stamp duty be payable on the same ?
We are told that Stamp Authorities consider the income which the landlord will earn of the said security deposit as rent and such yearly income is being added to the rent and the stamp duty is claimed by the stamp authorities on such amount. In our respectful submission, there is no provision under the Stamp Act to recover any stamp duty on interest free security deposit which is required to be returned on the determination of tenancy or any income which would be earned out on the same or any assumed income. There is a provision for recovery of such stamp duty and therefore by any letter or order or circular or notification, stamp duty authorities cannot claim or recover any stamp duty. It is being said that there is internal letter or circular for recovery of such stamp duty. It is submitted that under no letter or writing or circular such recovery can be made as stamp duty unless the same squarely falls within any one or more Articles of Schedule I of Bombay Stamp Act. Therefore, in our opinion, no extra stamp duty could be levied for interest-free security deposit which is required to be returned at the determination of tenancy or before that. Such deposit is neither fine nor premium nor any amount advanced.
It is also being claimed or said that under the provisions of Article 5(g-d), stamp duty is payable on the are of the tenanted property. The said Article 5 (g-d) applies in a case where tenancy rights are being transferred by a tenant himself. The said Article 5(g-d) has no application when landlord creates tenancy in favour of a tenant. It is submitted that Article 5(g-d) has no application in case of new tenancy agreement between the landlord and tenant.
In short, stamp duty will be payable either at 10 per cent or at concessional rate only on the consideration of rent received or fine or premium paid or any money advanced or to be advanced or payment of share of the landlord to Government Revenue, cess, municipal rates or taxes.
Now we will consider payment of stamp duty on Leave & Licence Agreement
Leave & Licence Agreement and the Tenancy Agreement are both different types of Agreement. The tenancy agreements are governed by the Transfer of Property Act and the Maharashtra Rent Control Act. The Maharashtra Rent Control Act. The Leave and Licence Agreement are governed by the Easement Act and Maharashtra Rent Control Act. The Maharashtra Rent Control Act also distinguishes between Leave and Licence Agreement are governed by the Easement Act and Maharashtra Rent Control Act. The Maharashtra Rent Control Act also distinguishes between Leave & Licence Agreement and Tenancy Agreement and therefore both of them are not same.
We are told that Stamp Authorities apply Article 36 of Schedule I of Bombay Stamp Act and claim of stamp duty on Leave & Licence Agreements. In our humble opinion, Article 36 of Schedule I of Bombay Stamp Act cannot and does not apply to Leave and Licence Agreement. Leave and Licence Agreement falls within Article 5(h) of Schedule I. As there is no such specific provision of Leave & Licence Agreement under Schedule I, Article 5(h) will apply and only stamp duty of Rs. 20/- is required to be paid. No stamp duty could be recovered under Article 36 of Schedule I of Bombay Stamp Act. Such a demand is not legally valid. Leave & Licence Agreement will attract Stamp duty of Rs. 20/- only irrespective of period of Licence, Licence fee, Security Deposit, advance payment of compensation or Licence fee or payment of share of Taxes and cess payable by the Licensor.
1472

STAMP DUTY IN RESPECT OF VARIOUS DOCUMENTS
RELATING TO PREMISES IN A CO-OPERATIVE SOCIETY
By Bankim P.Khona , Solicitor
Posted on 05 Feb 2000

Note : All the answers are given on assumption that the properties are situate within Greater Mumbai, because the stamp duty payable on the instrumental for immovable properties situate at different places is different.

Stamp duty on Agreement for Transfer of Share Flat :
Q.1. Is it necessary to pay the stamp duty exceeding Rs. 20/- on an Agreement for Transfer of shares in a co-operative society which gives to the Transferee the right to use and occupy a flat in a co-operative society ? If yes at what rate ?
Ans. The stamp duty payable on an Agreement for transfer of shares in a co-operative society, which gives to the transferee a right to use, occupy and enjoy a flat in a co-operative society exceeds Rs. 200/-. In the case of non-residential premises it is at the flat rate of 10% of the true market value. However, in the case of residential premises, the stamp duty payable on the agreement is as per Article 25 of the Bombay Stamp Act as under :-
“Article 25. Conveyance (not being a transfer charged or exempted under Article 59) –
On the true market value of the property which is the subject matter of the Conveyance –
(1) if relating to residential premises consisting of building or unit.
by, or in favour of, a co-operative housing society registered or deemed to have been registered, under the Maharashtra Co-operative Societies Act, 1960; or
to which the provisions of the Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963, or the provisions of the Maharashtra Apartment Ownership Act, 1970 apply; or
by such society in favour of its member or incoming member whether in consequence of purchase of its shares or not; or
by a member of such society in favour of another member and incoming member whether in consequence of transfer of its shares to another member or not; and the value of which –
does not exceed rupees 1,00,000. — NIL
exceeds rupees 1,00,000 but does not exceed rupees 2,50,000 — 0.5 per cent of the value
exceeds rupees 2,50,000 but does not exceed rupees 5,00,000 – 1,250rupees plus 3 per cent of the value of above rupees 2,50,000
exceeds rupees 5,00,000 but does not exceed rupees 10,00,000 — 8,750 rupees plus 6 per cent of the value above rupees 5,00,000
exceeds rupees 10,00,000. 38,750 rupees plus 8 per cent of the value above rupees 10,00,000.
(2) if relating to land for construction of residential premises and falling under the descriptions in items (a), (c), or (d) of sub-clause section (1). – The same duty as is applicable under sub-clause (1).

Liability to pay Stamp Duty :
Q.2. Who is liable to pay the stamp duty in respect of the transfer of shares and flat in a co-operative society ?
Ans. The stamp duty in respect of transfer of shares and a flat in a co-operative society could be decided as regards payment by an agreement between the parties. Either one of them can agree to pay or they may agree to share in such proportion as they may agree amongst themselves. In the absence of such contract, under section 30(b) of the Bombay Stamp Act the same is payable by the transferee i.e. the purchaser.

Stamp Duty as per Market Value :
Q.3. On an Agreement for Transfer of share in a co-operative society the parties have paid the stamp duty as per the value stated in the agreement. However at the time stated in the agreement. However at the time of registration of such agreement the sub-registrar concerned insisted for the payment of the stamp duty as per the market value calculated on the basis of ready reckoned.
Whether the sub-registrar can do so ? If the stamp duty is not paid as demanded by the sub-registrar whether he can impound the agreement ? In such case what remedies are liable to the Transferor and the Transferee ?
Ans. The stamp duty on an agreement for transfer of shares in a co-operative society is payable on the true market value of the premises being transferred. The value stated in the agreement does not determine the stamp duty payable on the same. For the sake of convenience, the State Governmetn has introduced a Ready Reckoner as the market value of the properties in Greater Mumbai. Such Ready Reckoner is not a final word. The obligation of the party to pay stamp duty is provided under the Act on the amount of the true market value. If according to the party the market value is different than the market value calculated on the basis of the rate mentioned in the basis of the rate mentioned in the Ready Reckoner then the party cab refuse to pay additional stamp duty and the sub-registrar will be required to forward the document to the Collector under section 32 (a) of the Bombay Stamp Act for determining the correct market value and the stamp duty payable on the same. In case the party does not accept the decision of the Collector then the said party can go into appeal under section 32 (B) of the Act before the Dy. Inspector General of Registration and Dy. Controller of Stamps.

Stamp Duty on Transfer of Shop :
Q.4. At what rate the stamp duty is payable on the agreement for Transfer of a shop in a co-operative society ?
Ans. A shop is non-residential premises and therefore, the concessional rates prescribed under Article 25(d) for residential premises do not apply. The stamp duty payable is 10% of the true market value of a shop, in the case of an agreement for transfer of shop in a co-operative society.

Stamp Duty on Transfer of Garage :
Q.5. At what rate the stamp duty is payable on an Agreement for Transfer of a garage in a co-operative society ?
Ans. The stamp authorities consider a garage to be non-residential and therefore, as in the case of shop stamp duty is payable at the rate of 10% of the true market value of the garage.
Q.6. What is the responsibility of the managing committee and society when flat / shares are transferred in case the proper stamp duty is not paid.
Ans. There is no responsibility on the Managing Committee and the Society when the flats/ shares are transferred without payment of proper stamp duty or any amount. It may be, however, stated that sometime back the Registrar of Co-operative Societies had issued a circular directing the societies not to transfer shares / flats unless proper stamp duty is paid. It is submitted that the Managing Committee is neither empowered nor does it possess a skill to determine the proper stamp duty payable on such an agreement.

Society’s responsibility for payment of Stamp Duty :
Q.7. Whether society is responsible for payment of stamp duty on an Agreement for transfer of shares and flat in a co-operative society ?
Ans. The Society is not responsible for payment of stamp duty on an agreement for transfer of a flat and shares in a co-operative society. The responsibility to pay the stamp duty is only that of the transferor and / or transferee.
Stamp Duty on Allotment Letters Issued by Society
Q.8. A co-operative society has purchased a plot for construction of residential building
for its members out of the funds contributed by its members. When such society issues allotment letters to its members for allotting flats how much stamp duty is payable on such allotment letters ?
Ans. In the case where a co-operative society has purchased a plot for construction of residential building for its members out of the contribution by its members, the allotment letter to its members for allotment letter to its members for allotment letter to its members for allotment of a flat does not attract any stamp duty.

Non-payment of proper Stamp Duty on previous Agreement :
Q.9. By an Agreement dated 1st March 1991 prepared on Rs 10/- stamp paper Mr. A. a member of a co-operative society in Bombay transferred his five shares and a flat to Mr. B for the consideration of Rs. 8,00,000/-. The said agreement dated 1st March, 1991 is not registered. The conveyance of the building and the land in favour of the society has yet not been executed by the builder and the owner of the land. The society admitted Mr. B as member and transferred the five shares and the flat to the name of Mr. B. By another Agreement dated 1st February, 1996 Mr. B transferred his said five shares and the said flat to Mr. C for the consideration of Rs. 13,50,000/-. The stamp duty amounting to Rs. 66,750/- has been paid on the said Agreement dated 1st February, 1996. The said Agreement dated 1st February, 1996 is duly registered with the sub-registrar concerned. Whether the said Agreement dated 1st March, 1991 is properly stamped ? If not who is responsible for payment of stamp duty on it ? Whether Mr. C can be called upon by the stamp authorities to pay the deficit stamp duty including the penalty if any on the said Agreement dated 1st March, 1991 ? In this case whether at the time of execution of the conveyance of the building and the land in favour of the society Mr. C will be required to pay and additional stamp duty in respect of his flat inspite of the fact that his Agreement dated 1st February, 1996 is duly registered.
Ans. The Agreement dated 1st March, 1991 which is prepared on Rs. 10/- stamp paper is not properly stamped. The agreement was required to be stamped with the amount at the rate prescribed under Article 25(d) of Schedule I to the Bombay Stamp act. On the amount of Rs. 8 lakhs being the true market value, on 1st March, 1991 for the said agreement the stamp duty payable was Rs. 33,000/-. The responsibility to pay the stamp duty was that of the transferor and / or transferee. I.e. MR. A. and / or MR. B as per their agreement with regard to the payment of stamp duty and in absence of such an agreement the responsibility was that of Mr. B, the transferee, Mr. C. who has agreed top purchase the said shares and the premises is not liable to pay any stamp duty and in absence of such an agreement the responsibility was that of Mr. B, the transferee, Mr. C. who has agreed to purchase the said shares and the premises is not liable to pay any stamp duty and / or penalty on the said agreement dates 1st March 1991. The authorities cannot recover the same from Mr. C. In the case of convyance of property where stamp dutyis paid and agreement is registered no additiopnal stamp duty will have to be paid for the said flat.

Stamp Duty on Exchange of Flat :
Q.10. Whether any stamp duty is payable when flats are inter-transfers within the members of these society ? Can society allows such inter-transfers without execution of proper agreement to transfer and patyment of stmap duty ?
Ans. Inter se transfer of flats among the members of the society is an exchange and the stamp duty shall be paid as per Article 32 of Schedule I to the Bombay Stamp Act. The Stamp duty payable on the exchange and the stamp duty shall be paid as per Article 32 of Schedule I to the Bombay Stamp Act. The stamp duty payable on the exchange is as per conveyance i.e. payable under Article 25(d) of Schedule I to the Bombay stamp Act. It is necessary to execute a Deed of Exchange for transfer of flats among the members. The Deed of Exchange will be required to be stamped at the concessional rate under Article 25(d) of Schedule I to the Bombay Stamp Act.

Q.11. In view of the decision of the Bombay high Court in the case of Usha Arvind Dongre vs. Suresh Raghunuth Kotwal whether it is necessary to pay stamp duty on transfer of shares in a co-operative society ? Please also consider the judgement of the Bombay high Court in the case of Hanuman Vitamin Foods Pvt. Ltd. (AIR 1990 Bombay 204).
Ans. The judgement of the Bombay High Court in Usha Arvind Dongre vs. Suresh R. Kotwal (1991 CT). 507) was in the matter was discussed therein and decided under the provisions of section 17(1) (d) of the Indian Registration Act. The issue of stamp duty was not involved and, therefore, the provisions of the Bombay Stamp Act were not gone into in the said judgement. The said judgement was delivered by a single Judge of the Bombay High Court, whereas the judgement in the case of Hanuman Vitamin Foods Pvt. Ltd. (A.I.R. 1990 204) was specifically on the issue involving the stamp duty payable on the agreement in the case of sale of shares of the Co-operative Society and the flat. According to the said decision, the stamp duty is payable on such agreement for sale of shares wherein a right to use and occupy the flat and premises is attached to the ownership of shares. The said decision was of a Division Bench and therefore, in view of the decision in the case of Hanuman Vitamin Foods Pvt. Ltd. The stamp duty is payable on the transfer of shares in a co-operative society.

Stamp Duty on Conveyance :
Q.12. At what rate the stamp duty is payable on a conveyance of a building and the land in favour of a co-operative society by the builder and the owner of the land ? Whether the members of the society who have paid stamp duty on their respective agreement for purchase of flats are not required to pay any additional stamp duty or whether such members gets adjustment of the amount of stamp duty paid by them on their respective agreement and are required to pay the balance stamp duty based on the market value of their respective flat on the date of execution of conveyance ?
Ans. The stamp duty payable on a conveyance of a building and the land thereunder in favour of a co-operative society by the builder and / or the owner of the land shall be paid on the true market value of each unit viz., flat, shop etc. All non-0residential units will attract stamp duty at 10% of the true market value and the documents in respect of each residential unit viz., flat, flat etc., (other than shop) will be required to be, stamped at the concessional rate as provided under Article 25 (d) of Schedule I to the Bombay Stamp Act. However, for the purpose of calculating the market value the date of the agreemetn will be concsiderd and not the date of conveyance; and that the stmp duty will be at the rate prevalent at the date of the conveyance and not the date of the agrement of the flat purcahsed.

Stamp Duty on Sale of Balance F.S.I. :
Q. 13. Whether direction of Commissioner not to register the society unless the stmp duty paid by all the memebrs be challenged ? Is it not against the provisions of Maharashtra Co-operation Societies Act ?
Ans. It is difficult to correctly opine or reply to this query. But in my humble opinion it is an obligation and duty of every citizen to pay requisite stamp duty on the agreement to purchase a flat and therefore the agreement which is not properly stamped cannot be taken into consideration the direction given by the Commissioner not to register such Society unless all person have paid stamp duty on their respective agreement may not be invalid. The direction given by the Commissioner asking all the intending members to comply with the provisions of the Bombay Stamp Act and pay stamp duty could not be considered against the provisions of the Maharashtra Co-operative Societies Act. 1960.
879

Accommodation Times News Services

By Advocate K K Ramani

To

Hon’ble Chief Minister.

Government of Maharashtra

Mantralaya, Mumbai 400 032

Sub:       Stamp duty on Deemed Conveyance Deeds.

Respected Sir,

Presently, some Collectors of Stamps in Mumbai demanding Building Completion Certificate for adjudicating the stamp duty on the Deemed Conveyance on the basis of Circular dated 26^th November, 2012 issued by the Department Revenue and Forest.  In my opinion this demand is absolutely unjustified being contrary to the provisions of law for the reasons mentioned hereinafter:

Rule 8 of the Maharashtra Ownership Flats Rules, 1964 talks about the period of submission of application for registration of the cooperative society and Rule 9 thereof talks about period for conveyance of title of Promoter to the Cooperative Society in the matter of regular conveyance deed. These time limits are based not on state of construction but sale of flats and, therefore, importing the requirement of completion of construction as a pre-condition to conveyance renders these provisions redundant and unworkable. This can be illustrated by means of following example :

Supposing a builder plans to construct 30 Flats in a building.  As soon as he gets Commencement Certificate, he sells 10 flats.  As per Rule 8 of MOFA, the Builder is supposed to submit an application for registration of cooperative society within 4 months from the date when 10 flats are sold by him.  Let us presume that the registration of the Society takes 6 months and the building still remains under construction.   As per Rule 9 of MOF Rules, 1964 within 4 months from the date on which the cooperative society is registered, the builder has to give conveyance to the Society irrespective of the fact whether building is completed or not.

As per Maharashtra Ownership Flats Act, 1963 read with MOF Rules, 1964 (specially Rule 8 and 9) a builder is duty bound to give the conveyance within 4 months from the date on which the society is registered.  He cannot wait for building completion certificate. Registration of Society is to be applied for when only 10 flats are sold. The obligation is based on sale of the prescribed number of flats and not construction thereof when, as a general practice, sale takes place before completion of construction and even before the construction commences. If, therefore, he does not give conveyance on account of non-procurement of completion certificate, he will be acting against the MOF Rules.

If building completion certificate cannot be a condition precedent for grant of regular conveyance to the Society, it certainly cannot be made compulsory for the deemed conveyance. This fact has been appreciated by the department of revenue while issuing circular dated 26^th November, 2012 (copy enclosed). The circular expresses urgency of action and details the procedure to be followed as well as the actions to be taken by the concerned officers. The circular lists out in Schedule A, the minimum required documents for valuation of the conveyance. Particular attention is drawn to item 4 of the Schedule which along with its translated version is as under:

“the approved plan for construction issued by Municipal Corporation and Building completion certificate/ In case the approved plan is not available, a certificate of the Architect”.

The above Circular is proper being consistent with provisions of MOFA and in accordance with the requirement of the purpose for which the documents are demanded. In order to ascertain the stamp duty on the conveyance deed the Collector of Stamps has to verify the balance FSI and charge stamp duty thereon at current market value. The approved plan with the occupation certificate shows unutilised FSI which can be valued by the authority at current market value. The above referred circular makes it abundantly clear that if the Occupation Certificate/Building Completion Certificate is not available, the society can tender Architect certificate specifying the balance FSI. It means even in the absence of Occupation Certificate/Building Completion Certificate, the adjudication can be completed by verifying the Architect’s Certificate regarding balance  FSI.

A similar circular has been issued by the Housing Department Govt. of Maharashtra on 25^th February, 2011 (copy enclosed) which also does not provide for mandatory furnishing of building completion certificate.  Some of the Collectors of Stamp are misinterpreting the aforesaid circulars.  In fact, the interpretation placed by those Collectors of Stamp to the aforesaid circulars is wrong and presuming for the sake of argument that their interpretation is correct, it is also settled law that a circular cannot go beyond the statutory Act and the Rules made thereunder. It will be relevant in this connection to refer to the provisions of section 11(3) of MOFA which read as under:

Section 11(3) If the promoter fails to execute the conveyance in favour of the co-operative society formed under Section 10 or, as the case may be, the company or the association of apartment owners, as provided by sub-section (1), within the prescribed period, the members of such co-operative society or, as the case may be, the company or the association of apartment owners may, make an application, in writing, to the concerned Competent Authority accompanied by the true copies of the registered agreements for sale, executed with the promoter by each individual member of the society or the company or the association, who have purchased the flats and all other relevant documents (including the occupation certificate, if any), for issuing a certificate that such society, or as the case may be, company or association, is entitled to have an unilateral deemed conveyance, executed in their favour and to have it registered.

The portion highlighted, for emphasis, makes it clear that furnishing of occupation certificate is subject to its availability. The issue of building completion certificate, being a step subsequent to issue of occupation certificate, is also, therefore, subject to availability. While prescribing it to be so, the legislature gave due recognition to the fact that a large number of societies in Mumbai are such where the promoters have not even discharged their obligation of obtaining occupation certificate / building completion certificate and if production of such certificate is made mandatory, it will render the whole scheme unworkable.

Introduction of Sub-section (3) in Section 11 of Maharashtra Ownership of Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963 is aimed to enable conveyance in favour of co-operative societies where the promoter has failed and is reluctant to comply with his obligation under this Section to convey the title over the land and building to the society after it is formed in accordance with the provisions of Section 10 of the Act. The legislative measure is hailed as a highly needed one in view of the prevalent and growing instances of default in the matter, causing grave unintended handicap to the societies and their members. It is heartening that the government’s endeavour is to ensure that maximum number of societies benefit under the scheme and steps have been taken from time to time to remove bottlenecks in procedures and make it workable. To name one, is the circular by Inspector General of Registration and Controller of Stamps dated 12^th April, 2012 directing matters of adjudication of Deemed Conveyance to be decided on priority basis and formation of a committee of officers of concerned departments for removal of obstructions in the matter of stamp duty and registrations.  The laudable object of such legislative and follow-up exercise is being frustrated by  the practice being adopted in the matter of adjudication of stamp duty in respect of the Deemed Conveyance Deed under which certain Collectors of Stamp are demanding Occupation Certificate and Building Completion Certificate for this purpose.

The requirement as laid down in law as well as the above mentioned circulars is not being followed in letter and spirit by some collectors of stamps when they insist on compulsory furnishing of Building Completion Certificate and Occupation Certificate. As a sample, copy of notice received by one housing society is enclosed. Such insistence, instead of facilitating the conveyance, has become a stumbling block in deemed conveyance. The same is not only contrary to the provisions of section 11(3) of MOFA, but also unworkable in most of the cases.

Further, the demand for Occupation Certificate / Building Completion Certificate has no relevance to the scope of consideration by the collector of stamps. Under the scheme, it is the Competent Authority under the Act which has to consider the genuineness of the society’s request and all other matters relating to grant of deemed conveyance. When, even for consideration by the Competent Authority furnishing of occupation certificate / building construction certificate is not mandatory, making it compulsory for adjudication of stamp duty is without any purpose.

Once a certificate certifying that applicant society is entitled to have deemed conveyance is issued, all subsequent stages in the process are only to give effect to this order and stamp duty adjudication is one such step. The law does not permit any authority in subsequent proceedings to sit in judgment over the decision of the authority in previous proceedings. The limited jurisdiction of Collector of Stamps is only to decide the stamp duty payable and for this purpose to determine whether any balance FSI is available on the plot of land on the basis of approved plans or the Architect Certificate. For the Collector of Stamps, only those documents have relevance which enable him to take the decision within his purview and when so viewed, insistence on occupation certificate / completion certificate has no relevance.

In the interest of effective implementation of the scheme of deemed conveyance which is the crying need of the day, your kind intervention is sought in removing the handicap by issue of suitable clarifications and instructions to avoid the practice of demanding the Occupation Certificate / Building Completion Certificate. This will go a long way in ensuring the intended benefits of deemed conveyance to the large number of deserving societies which is presently being denied to them because of such unwarranted insistence.

Hope you will be kind enough to issue clarification.

Yours Truly,

Sd/-

K.K. Ramani

  Advocate4076

By Santosh Kumar & Sunit Gupta

By Accommodation Times News Services
After the announcement of the Stamp Duty Amnesty 2008, there are some consultants and self designated specialists who are misguiding the people b strongly advising that full stamp duty will be charged on agreement for sale even prior to 10-12-1985. Not only that they are stressing that even the registered document will also attract stamp duty. Failing which 10 times the stamp duty amount will be levied as penalty at the time of conveyance. Most of the people are very much confused because at Stamp duty office they are not accepting documents prior to 10-12-1985 contrary to advise given by the consultants. Please note there is no denying the benefit of amnesty, because all such documents are duly stamped, hence they do not need further stamping, as such the benefit of amnesty does not arise.
Our office has been receiving several telephonic clarifications, since we are the publishers of the Ready Reckoner’s for all earlier years. To clarify this doubt GLOBUS spoke to Santosh Kumar, senior estate valuer and co-author of the Stamp Duty Ready Reckoner and Market Value of Flats in Mumbai / Thane, who clarifies the doubt as under.
The stamp duty on agreement for sale prior to 10-12-1985 is Rs. 5 only and no more stamp duty will be charged on all such documents. This point was also clarified by Dr Nitin Kareer, I.G.R. Maharashtra, during a public meeting held on 11-4-2004 at K.C. College, Mumbai. In this connection Law and Judiciary Department of the Government of Maharashtra, has also issued a clarification on 24-1-1995, the same is reproduced on backside, which is self explanatory. In view of this clarification all such documents can be annexed with the deed of confirmation on Rs. 100 stamp paper only and the deed of confirmation will be registered annexed with agreement for sale on Rs. 5 Stamp paper. There are several such documents already registered by the sub-registrar of assurance Mumbai, that can be inspected under the Right to Information Act. In case of difficulty one should not hesitate to contact I.G.R. Maharashtra, Pune.
The agreements for sale prior to 10-12-1985 are classified in two groups. One that is registered and another one not registered. As such these agreements will be treated differently at the time of conveyance in favor of the society. Here it is necessary to clarify that stamp duty was applicable even prior to 10-12-1985, but there was an option for payment at the time conveyance. However, for conveyance executed up-to 16-3-1988, residential flat up-to 650 sq ft carpet area was fully exempted from stamp duty and area up-to 1000 Sq ft was exempted up-to 60% of the stamp duty. Because of this provision there is a general notion that there was no stamp duty prior to 10-12-1985.
Now at the time of conveyance, stamp duty liability of all the present members must be cleared. For the liability of registered agreement on Rs. 5 Stamp paper, prior to 10-12-85, the market value (not agreement value) as on the date of agreement will be considered, as purchase price agreement value only, because market value concept was not there at that time. The document which is not registered will be valued as per present market value, subject to depreciation, and stamp duty will be charged, in all the cases, as applicable today.
Regarding Stamp Duty on documents executed on 10-12-1985 and there after, all such documents must be registered after paying the stamp duty, failing which penalty at the rate of two times (not 10 times) of the deficit stamp duty will be charged. During amnesty this penalty is maximum Rs. 1000 only. At the time of conveyance they will not be required to pay any duty again, against their respective flats.
Comparative chart of stamp duty liability on agreement dated 1981 is as per Table-B.
From this example it is clear that if the document is registered, stamp duty will be Rs. 2,200 only against Rs. 1,29,000 for non registered document.

Courtesy Globus5499

By Accommodation Times News Services

INSTRUCTIONS FOR PAYMENT OF FEES ONLlNE

THROUGH GRAS I DEMAND DRAFT

STEP -1

1)         Mortgagor /s / Property Owner /s should visit

https://gras.mahakosh.gov.in/echallan/for payment offiling fees INR 1000 at designated bank branches through generation of challan or e-payment options as mentioned below:

• Visit https://gras.mahakosh.gov.in/echallan/
• Under Categories select”PAYWITHOUT REGISTRATION”
• Under payment mode select “E-payment or Payment acrossbank counter” (Cash / Demand Draft)

1. 1.    Under E Payment mode “Payment of filing fees could be doneonline through designated bank’s”
2. 2.    Under Payment across bank counter, “Payment of filing feescan be done through generation of challan accompanied withcash / demand draft at designated bank’s”

• Under article code select “6 (1) – Agreement Relating to Deposit of Title Deed”
• Under department select “INSPECTOR GENERAL OFREGISTRATION”
• Under payment type select“REGISTRATION FEES”
• Under district select “Relevant district where property is located”
• Under office name select “Sub-Registrar Offices withinJurisdiction”
• Under period year select “Relevant year of filing”
• Under payment mode select “One time / Adhoc”
• Under object amount of tax “Enter INR 1000″
• Under Name “Enter name of mortgagor/property owner”
• Under Property Details “Enter Survey/GATICTS/NO“(Refer Index-2 /Agreement)
• Undor Property Details “Enter Area(Sq.M / HEC) (Refer Index – 2IAgreement)
• UndorProporty Details “Enter Locality & City”
• Unoor Property Details “Enter Pin Code”
• Under Party Name 2 insert “Axis Bank Ltd”
• Select bank name for e-payment or payment across bankcounter (Cash I Cheque) at designated bank branches.
• Automated filing fees payment challan would be generated
• Print the challan
• Visit designated bank’s for payment of challan& collectauthorized challan copy from the bank.

INSTRUCTION FOR AUTOMATED FILING NOTICE OF INTIMATIONREGARDING MORTGAGE BY WAY OF DEPOSIT OF TITLE DEEDS

STEP – 2

2)         Post payment of filing fees/preparation of demand draft, Mortgagor /s Property Owner/s should visit atwww.igrmaharashtra.gov.infor generation of automated “Notice of Intimation regarding Mortgage by way of deposit of Title Deeds” & refer below instructions:

•    Visit http://igrmaharashtra.gov.in/

• UnderOnline Facilities select”Public Data Entryfor Filing”
• Start filing new entry.
• Create your user name & password (Note: Password length mustbe minimum 8 characters & must contain at least one (capitalletter, small letter, special character and digit e.g.abcdA09@)
• Under Start data entry select “Date of mortgage (DD I MM IYYYY) # Memorandum of entry for date”.
• Under section “Mortgagee Details “MortgagorIslProperty Ownerto ensure below details are captured under relevant columns:
  • Name of Bank: Axis Bank Ltd
  • Bank Location: Ground floor, Axis House

Ø   TAN No: MUMU01693G

• Loan details: (Disbursed amount)

Ø   Interest rate: (# Rate of interest as per accepted sanctionletter)

• Under section “Mortgagor Details” MortgagorIslProperty Ownerto ensure below details are captured under relevant columns:
  • Select Party Type : (Individual I Organization)
• ØName &Address of all Mortgagor/s/Property Owner/s(Select Add : Another party for multiple Mortgagor/s/Property Owner/s)
• Under section “Property Details”Mortgagor /s/Property Ownerto ensure below details are captured under relevant columns:
  • Select District: “Relevant district where property islocated”

Ø   Select Taluka : “Relevant taluka under that district”

• Select Village: “First 3 letters of village”
• Select Urban or Rural: “Tick appropriately as per propertylocation”
• Select Hadd Type: “Corporation”
• Select Hadd Name: “Relevant from drop-down menu’”
• Input Road & Landmark: “As per Memorandum of Entry”

Ø   SelectAttribute: “Relevant drop-down menu as per details available on
Memorandum of Entry/lNDEX-II/Agreement”

• Select Property Type: “Relevant from drop-down menu”
• Select House Type: “Relevantfrom drop-down menu”
• Input Buildup Area/Unit/Building Name I Floor No /Flat No:
• Relevant drop-down menu as per details available onMemorandum Of Entry/INDEX-II/Agreement”
• Select details of Title deed deposited with bank:”Relevant selection as per copy of documents receivedfrom bank”
• Under section Payments Details “Mortgagor/s/ Property Ownerto ensure payment details of filing fees are filled in & correct asper relevant mode of payment.”
• Click on “SAVE & VIEW NOTICE”
• Automated “Notice of Intimation regarding Mortgage by way ofdeposit of Title Deeds” shall be generated
• Click on “SUBMIT DATA/UPLOAD DOCUMENTS”
• Take print of automated “Notice of Intimation regarding Mortgageby way of deposit of Title Deeds”
• Click on “CLOSE”, post which you shall see list of SRO’s alongwith designated days of visit along with unique token no.
• Frank the Automated “Notice of Intimation regarding Mortgageby way of deposit of Title Deeds” for INR 100.
• Check with physical print whether all relevant data ofMortgagor/sIProperty owner/s on the automated “Notice ofIntimation regarding Mortgage by way of deposit of TitleDeeds” are inline with documents received from the bank.
• Stamp duty amount should match with memorandum of entryexecuted
• Mortgagor I s I Property owner/s thumb impression is captured
• Mortgagor/s / Property owner/s signature is available.
• Mortgagor/s / Property owner/s photograph’s are duly affixed.
• Mortgagor/s / Property Owner/s to visit designated Axis BankLoan Centre for signature & seal attestation post generation ofAutomated “Notice of Intimation regarding Mortgage by way ofDeposit of Title Deed”

STEP –3

3)         Mortgagor/s / Property Owner should carry below mentioneddocuments on the designated day for filing the notice of intimationwith the concerned sub-registrar:

• Duly filled & attested ‘Notice of Intimation regarding Mortgage by way of Deposit of Title Deed’
• Bank I Self- attested KYC of all property owner/s/mortgagor/s.
• Bank attested copy of Equitable Mortgage Document(Memorandum of Entry)
• Bank attested copy of Sanction Letter
• Challan for payment of INR 1000
• INR 300 as ‘Handling Charges’ in form of cash
• Bank attested copy of INDEX-I!
• Self attested identity proof of Authorized bank representative
• Franking details letter from bank

4)         All mortgagor/s / Property owner to be physically present during filing of notice of intimation.

5)         Mortgagor/s / Property owner to ensure no fields are left blank in the “Notice of Intimation regarding Mortgage by way of Deposit of TitleDeed”

6)         Post filing the notice of intimation, ensure to collect the duly acknowledged copy of intimation from the sub registrar

7)         Mortgagor/s/Property owner to ensure deposition of duly acknowledged
photocopy of intimation is sent to the respectiveasset loan center from where disbursal took place.

Additional Note:

• Cases wherein mortgagor/s/property owner is unable to visit thedesignated sub registrar office, registered power of attorney asdefined in “The Registration (Maharashtra Amendment) Act,2010″ needs to be executed.

STEP 1

Payment of INR 1000 Filling Fees

Visit GRAS site

https://Qras.mahakosh.Qov.in/echallan/

Under Categories Select

“PAY WITHOUT REGISTRATION”

Select Relevant Payment Option

?

Option 1

E – Payment

?

Fill in Required Details

?

Select Respective Bank for Payment

?

Make Payment & Challan gets generated

?

Print the Challan

Option 2

Payment Across Bank Counter

?

Fill in required details

?

Select Respective Bank for payment of filing fees by Cash I
Demand Draft

?

Filing Fees Payment Challan Generation

?

Print the Challan

?

Visit designated Bank along with Challan Copy

?

Payment of filing fees by Cash I Demand Draft

?

Authorized Challan Copy Collection from Bank

STEP 2

Data Entry for Filling Automated Notice Of Intimation

Visit :

http://grmaharashtra.gov.in/

Under Online Facilities select

“Public Data Entry for Filing”

?

Create Your User Name & Password

?

Fill in required details

?

Generation of Automated”Notice of Intimation”

?

Print Automated “Notice of Intimation”

STEP3

Frank “Notice Of Intimation”for INR 100

STEP 4

Ensure Photograph and Signatures of allMortgagor’s’ Property owner/s are presenton “Notice of Intimation”

STEP 5

Visit Respective Axis Bank Loan Centrefrom where Loan originated for Signature& Seal Attestation of Mortgagee on”Notice of Intimation”

STEP 6

Visit Respective SROon designated daywith
all Mortgagor/s/ Property Owner/s

?

Execute “Notice of Intimation”

?

Collect duly filed AcknowledgementReceipt of
“Notice of Intimation” from SRO

STEP 7

Dispatch / Deposit photocopy of duly filed acknowledged”Notice of Intimation to Respective Axis Bank Loan Centre from where
loan originated”

904

By Accommodation Times Bureau

17/1/Fixation of Land Rates/2012-RD/5004 In exercise of the powers conferred under sub-rule (3) of Rule 4 of the Goa Stamp

(Determination of True Markat Value of Property) Rules, 2003, the Government of Goa is pleased to issue statement of minimum Land Rates as follows for the year 2013-14 which shall come into effect from 1st January, 2013 to 31st December, 2014.

The below mentioned Taluka-wise minimum rates are base values and are applicable to S1 Zone and upto an area of 1000 sq. meters depending upon the zone and the area involved, the base values will change as indicated in the appendix to this statement.

Ashutosh Apte, Under Secretary (Revenue-I).

Porvorim, 26th December, 2012.

Download The Official Gazette : 1213-40-SI-OG.pdf

By Accommodation Times Bureau

If a tenant purchasing property from landlord in a pugree system property, the stamp duty was leviable on 90% of the value of stamp duty ready recknor. Now in State Budget of Government of Maharashtra, levying stamp duty on 100% value according to stamp duty ready reacknor.

Pugree system emerged before 1949 to pay entire sale proceed in black money or in cash and just show notional rent of Rs.1 or two to show to the government that the deal is of tenancy in nature. Off late, Pugree system was legalised by state government and hence transfer tenancy became legal property transaction.

Just Rs.200 sq.ft. Was the value counted for any transaction previously for residential purposes and for stamp duty calculation.

Stamp duty is now becoming major and main source of revenue for state governments. The purpose of stamp duty and registration charges are to just up keep the administrative cost to record the transaction. It is now have emerged as milking cow for exchequers. Though the rationalisation of stamp duty was required but in spite of that government in our country do not understand the purposes for taxation. When there was 98% income tax, there were few who were paying taxes. But now since Income Tax have just reached 10%, targets for revenue from such taxes are over archived every time. The social engineering must be understood before applying any tax.

In all 37% taxes are imposed on property transaction for residential units besides local self government taxes. VAT, Service Tax, and Income Tax are just killing real estate sector which is feeding 200 industries and major contributor to GDP.

By Vimal Punmiya, FCA, LLB

Besides the current recession in the market, one of the prime reasons that have instigated the market for housing and realty sector to face a further downfall, is the modus operandi for calculating Stamp Duty Valuation, which has not been modified as per the prevailing market scenario, resulting in inflated costs of properties than its actual worth.

The Income Tax Act, 1961, Section 50C, further worsens the purchasers pleas and compounds the problem by laying emphasis on the ‘guideline value’ as adopted by the Stamp Duty Valuation Authorities. Section 50C which is a deeming provision, primarily states as follows:

• It says that the taxpayer (vendor) has to compute capital gains under Section 48 taking the full value of consideration as adopted by the stamp valuation authority for the purpose of registration.

   

• The vendor may either contest with the stamp valuation authority in regards to the value adopted for stamp duty purposes or if not contested before the stamp valuation authority, he is eligible to contest the valuation before the Assessing Officer (AO) at the time of assessment.

   

• If the tax payer has contested the value with the stamp valuation authority then he loses the right to contest the guideline value adoption with the AO.

   

• Where the tax payer does not contest with the stamp valuation authority or the AO, then the AO must adopt he value reckoned for the stamp duty purpose as apparent consideration for computing capital gains.

   

• Where the tax payer who did not contest before the stamp valuation authority, contests before the AO that the value adopted for stamp duty purpose exceeds the fair market value, the AO has to make reference to the valuation officer.

   

• If the value assesses by the valuation officer does not exceed the value adopted for stamp valuation then the valuation made by the valuation officer is to be adopted.

   

• If the valuation fixed by the valuation officer is more than the value adopted by the stamp valuation authority then the value adopted by the stamp valuation authority will be taken as deemed sale consideration.

Drawbacks of Section 50C / Stamp Duty Valuation

• Although the stamp duty department maintains a list of rateable value properties in Mumbai, the main concern is that in most of the cases the rates are much higher than the actual transacted rates for the property. However, instead of addressing the irregularity in the stamp duty rates, authorities have increased the stamp duty rates.

   

• Due to the high stamp duty, buyers have been quoting their property much below the actual transacted value. This is mainly because it enables buyers to save substantial amount on the stamp duty outgo (stamp duty is charged on the value of the property). This practice of the undervaluing the property is unethical and moreover it leads to accumulation of black money (unaccounted money) in the economy.

   

• Although the stamp duty rate may increase, the number of undervalued deals will also increase.

   

• The methods adopted by valuers is generally dependent on guideline value in some form or extent and hence is expected to have the impact of the bias.

   

• Financial hardships due to the exorbitant rates charged is much more than the transacted value.

In case of Mr. Thomas Ferreira

The assessee along with the co-owners was the owner of land at Valani (Malad), which has been sold. As per the agreement, the sale consideration received Rs.1,20,00,000/- which has been divided amongst the co-owners but it will be observed from the agreement that the stamp duty paid by the purchaser is on the market value which is Rs.25,44,64,000/-, thus placing a major financial hardship on the assessee.

In lieu of the aforesaid, the Ready Reckoner rates and the Income Tax provisions U/S 50C need to be liberalized.

By Deep J – The Realtybuff

Recently the J&K government made an unprecedented and historic move in their state, a complete stamp duty waiver for women in the state. Such a move has many social benefits from the perspective of women empowerment and safety for them in times of unforeseen events. There are many states such as Delhi and Haryana that offer a reduced stamp duty for women, all through the effort by these states is commendable it is still very high for the objective of increasing asset ownership by women. In our countrymen still, have higher salaries than women and let’s face it the glass ceiling still exists in many parts of the country.  The tax benefits of female home ownership should also be increased. Mumbai and Delhi already have high real estate prices, I do understand the government’s position that stamp duty is an important source of revenue but considering our socio-economic circumstances, the various state governments should take inspiration from the J & K government and completely abolish stamp duty for women and actively promote home ownership and asset ownership for women.

The post The Case Stamp Duty Waiver for WOMEN in Maharashtra appeared first on .

By Accommodation Times Bureau

CHANDIGARH

The Revenue Department of Punjab has amended a rule to curb the misuse of stamp duty rebate extended to women on property registration.

As per the amended rule, now if the property acquired by a woman is transferred in the name of a male relative within a year, the government will take back the 2 per cent rebate given to the woman at the time of property registration.

This scheme was reportedly misused by unscrupulous persons who registered the property in the woman’s name to avail of the 2 per cent rebate and later transferred the same in the name of a male relative.

The post Man misuses Stamp Duty Rebate in name of women appeared first on .