FAQs : Satmp Duty

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.