Possession is not sufficient for physical transfer of property as one also needs legal ownership of the said property. For ownership you need registration. At the time of registration, a person has to pay a government tax called stamp duty levied on property transaction.
Stamp duty is a tax collected by the government and is payable under Section 3 of the Indian Stamp Act, 1899. Stamp duty must be paid in full and on time, or else a penalty is attracted if there is a delay in payment. The instrument on which stamp duty is paid is considered a proper and legal document. It had a value of evidence and admitted to courts.
Stamp Duty When Payable
It is payable before execution of the document or on the next working day of such execution. Execution means parties to the document-putting signature on the instrument.
Delay in duty payment will pull in 2 percent per month to a maximum of 200% of the deficit amount.
Stamp papers are to be purchased in the name of either parties, i.e. seller or buyer involved in the agreement otherwise stamp paper is not valid. It is said to be valid for six months from the date of purchase only if duty is timely paid.
Liability of Payment
Exchange of property: both the parties have to bear stamp duty equally.
No agreement: the transferee or purchaser has to pay stamp duty.
According to Section 12 of the Act person executing the instrument with an adhesive stamp should cancel the stamp by writing name or initials. It is mandatory that the stamp is cancelled otherwise the stamp is deemed to be unstamped.
Stamp Duty In Punjab
Stamp Duty in Punjab is governed by the Indian Stamp Act,1899. Punjab government passed an amendment to the Act in 2017 called the Indian Stamp (Punjab Amendment) Act,2017.
Under this Act, the Punjab government has reduced the stamp duty from 9% to 6%.
Earlier the stamp duty was 9 percent which included 3 percent of Social security fund for urban areas under Section 3-C of the Indian Stamp (Punjab) Act,1899. Now the Punjab government has slashed it to 6 percent where 5 percent stamp duty and 1 percent is the additional stamp duty.
The Punjab government has relaxed stamp duty for women further by 2 percent. So, the stamp duty paid by the women is 4 percent and to check its misuse, the government has further amended that there should be no transfer within a year to female to male.
â€¢ Male 6%
â€¢ Women 4%
â€¢ Joint ownership (MALE AND FEMALE) 5%
This amendment is valid till 31 March 2019.
Stamp Duty in Haryana
In Haryana, the stamp duty payable is 7 percent for males in urban areas and 5 percent for females in urban areas. For rural areas, the stamp duty is 5 percent.
(This article was submitted by Ashmeet Singh of Panjan University as a part of B&B Associatesâ€™ internship program.)