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Registration and Stamp law -Fundamentals and Recent Changes

Registration and Stamp law -Fundamentals and Recent Changes. Presentation: Sanjay Jhanwar, Advocate Research: Ritu Soni , Advocate Raghav Kumar Bajaj, ACA . Types of stamps. Impressed stamps Stamps embossed or engraved on stamped paper; and

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Registration and Stamp law -Fundamentals and Recent Changes

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  1. Registration and Stamp law -Fundamentals and Recent Changes Presentation: Sanjay Jhanwar, Advocate Research: Ritu Soni, Advocate Raghav Kumar Bajaj, ACA

  2. Types of stamps • Impressed stamps • Stamps embossed or engraved on stamped paper; and • Impressions by franking machines generally being done by the banks • Adhesive stamps in the form of labels which can be conveniently stuck on the instruments. Recent changes in stamp law

  3. RegistrationConcept &Nature • Registration law apply to the instruments • Object of registration law • for keeping proper record of transactions • Concurrent List (Item No. 6): “Transfer of property other than agricultural land; registration of deeds and documents.” Recent changes in stamp law

  4. StampDutyConcept &Nature • Stamp Duty Law comprise of Indian Stamp Act as well as state legislations • Object of Rajasthan Stamp Act, 1998: • It’s a fiscal enactment • To collect revenue • To prevent evasion of revenue • Stamp Duty legislative competence : • Union List (Item No. 91): “Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.” • State List (Item No. 63): “Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.” • Concurrent List (Item No. 44): “Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty.” Recent changes in stamp law

  5. Compulsorily Registrable DocumentsSection 17 of Indian Registration Act, 1908 • Instrument of gift; • non-testamentary instruments which create, declare, assign, limit or extinguish any right, title or interest, of the value of one hundred rupees, and upwards; • non-testamentary instruments acknowledging the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and • leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent; • non-testamentary instruments transferring or assigning any • decree or order of a court or any award • when such decree or order or award create, declare, assign, limit or extinguish any right, title or interest • of the value of one hundred rupees and upwards Recent changes in stamp law

  6. Compulsorily Registrable DocumentsAs per Registration (Rajasthan Amendment) Act 18 of 1989 w.e.f. 18.9.89 • Agreement to sell immovable property possession whereof has been or is handed over to the purported purchaser; • Irrevocable POA relating to transfer of property in any way; Recent changes in stamp law

  7. Rajasthan Stamp Act, 1998Charging Section: Basis of charge • Section 3: Instrument chargeable with duty • Every instrument mentioned in the Schedule executed in the State on or after the date of commencement of this Act (i.e. on or after 27.05.2004) • Every instrument mentioned in the Schedule executed out of the State on or after the date of commencement of this Act (i.e. on or after 27.05.2004) relating to any property situate, or to any matter or thing done or to be done in the State AND is received in the State Recent changes in stamp law

  8. Rajasthan Stamp Act, 1998Charging Section: Basis of charge • location of property is not relevant • primary charge is attracted on execution of the instrument and the place of execution determines the liability to Stamp Duty • However a secondary liability for payment of Stamp Duty may be created in the event where the instrument, first executed in one state, is later brought into another state, where the property is located. Recent changes in stamp law

  9. How to use a stamp • Section 5: Several instruments used in single transaction of sale, mortgage or settlement • Section 6: Instrument relating to several distinct matters • Section 7: Instruments coming within several descriptions in the Schedule • Section 12: Cancellation of adhesive stamps • Section 13: Instruments stamped with impressed stamps how to be written • Section 14: Only one instrument to be on same stamp • Section 58 & 59: Refund Recent changes in stamp law

  10. Several instruments used in single transaction of sale, mortgage or settlementSection 5 Recent changes in stamp law

  11. Instrument relating to several distinct mattersSection 6 Any instrument comprising or relating to several distinct matters, shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters would be chargeable under this Act. Recent changes in stamp law

  12. Instruments coming within several descriptions in the ScheduleSection 7 An instrument so framed as to come within two or more of the descriptions in the Schedule, shall, where the duties chargeable thereunder are different, be chargeable only with the highest of such duties. Recent changes in stamp law

  13. Cancellation of adhesive stampsSection 12 Recent changes in stamp law

  14. Instruments stamped with impressed stamps how to be writtenSection 13 • “Every instrument written upon paper stamped with an impressed stamp shall be written in such a manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument” • Explanation 1: • If 2 or more stamp papers used  Some portion of such instrument should be written on each stamp paper or any blank stamp paper should be endorsed that such blank stamp paper is attached to another stamp paper on which the instrument is written • Explanation 2: • If only one stamp paper is used Plain papers may be used provided that a substantial part of the instrument is written on the stamp paper Recent changes in stamp law

  15. Only one instrument to be on same stampSection 14 • “No second instrument chargeable with duty shall be written upon a piece of stamped paper upon which an instrument chargeable with duty has already been written.” • Exception: Endorsement for the purpose of transferring any right created or evidenced thereby, or of acknowledging the receipt of any money or goods the payment or delivery of which is secured thereby Recent changes in stamp law

  16. RefundSection 58 & 59 Recent changes in stamp law

  17. Instruments executed outside Rajasthan and then brought into Rajasthan • Section 20: Payment of duty on certain instrument liable to increased duty in the state of Rajasthan • An instrument executed outside Rajasthan and chargeable to duty, which subsequently becomes chargeable with a higher rate of duty in Rajasthan, shall be charged only the differential amount. • “Where an instrument after becoming liable to duty in one state on execution there, becomes liable to duty also in another state on receipt there, it must first be stamped in accordance with the law of the first state and it will not require to be further stamped in accordance with the law of the second state, when the rate of the second state is the same or lower and where the rate of the second state is higher, it requires to be stamped only with excess amount and in according with the law and the rule in force in the second state (AIR 1963 SC 1307)” Recent changes in stamp law

  18. Rate of duty of the date of execution of instrument • Section 37(1) & 37(2): Examination and impounding of instruments • Every person having by law or consent of parties authority to receive evidence, and every person incharge of a public office, except a police officer, before whom any instrument, chargeable with duty, is produced shall examine such instrument in order to ascertain whether it is stamped with a stamp of the value and description required by the law force in the State when such instrument was executed or first executed. Recent changes in stamp law

  19. Relevant date for determining the rate of stamp duty. In the case of State of Kerala vs George Jacob reported at AIR 2006 Ker 111 the Hon’ble Kerala High Court mentioned that: “we hold that for the purpose of determining the rate of stamp duty, the date of execution as defined in Section 2(f) of the Kerala Stamp Act is the determining date and the date of presentation for registration or registration itself would not have any bearing whatsoever on the question”. Section 17 and section 2(f) of the Kerala Stamps Act, 1959 are pari-materia to the Section 17 and 2(xiii) respectively of the Rajasthan Stamp Act, 1998. Recent changes in stamp law

  20. Instruments unduly stamped by accident • Section 45: Instruments unduly stamped by accident Recent changes in stamp law

  21. Effect of Registration • Effect of Registration • Cannot validate the transaction which is otherwise invalid • Valid transaction to operate only from its otherwise effective date • Effect of Non-registration of Compulsorily Registrable documents • Not admitted as an evidence • Not to affect any immovable property Proviso: • Can be used as evidence for collateral transaction & • In suit for specific performance Recent changes in stamp law

  22. Effect of Non Payment of Stamp DutySection 39 of Rajasthan Stamp Act, 1998 Instrument not duly stamped cannot be admitted as evidence by any person having authority to receive evidence except in criminal proceedings. Recent changes in stamp law

  23. Time Limit for payment of Stamp Duty and Registration • Shall be stamped • Instruments executed in the State [Section 17] • Before or at the time or immediately thereafter on the next working day following the day of execution • Instruments other than bills and notes executed out of the State [Section 18] • Within 3 months after it has been first received in the State • Shall be presented for registration • Within 4 months from the date of execution (except Will) • with fine upto 10 times, within next 4 months Recent changes in stamp law

  24. Power of Attorney [Entry No.44] Recent changes in stamp law

  25. Power of Attorney [Entry No.44] Recent changes in stamp law

  26. Power of Attorney [Entry No.44] Recent changes in stamp law

  27. Gift [Entry No.31] • Same duty as on conveyance for a MV equal to the MV of the subject property (even if the instrument of gift contains any provision for revocation of the gift) • Concession on gift of immovable property to relatives [Notification No.F.12(25) FD/Tax/11-154 dated 09.03.2011 • Stamp duty = 2.5% • Relative = Father, mother, son, daughter, brother, sister, daughter-in-law, husband, wife, son’s son, daughter’s son, son’s daughter, daughter’s daughter Recent changes in stamp law

  28. Settlement [Entry No.51] Recent changes in stamp law

  29. Settlement [Entry No.51] Recent changes in stamp law

  30. Family SettlementNotification No. F.12(22) FD/Tax/2010-96 dated 09.03.2010 • Stamp duty chargeable on settlement deed executed in favour of family members = 1% of the MV of the property settled by such deed. • ‘Family Member’ means Father, mother, wife , brother, sister, son, daughter, grandson, granddaughter, daughter-in-law of settlor Recent changes in stamp law

  31. Partition [Entry No.42] • Same duty as on conveyance for the amt or value of the separated share or shares of property • Partition deed in respect of ancestral property [Notification No.F.4(14)FD/Tax Div/98-52 dated 9-July-1998] • 1% or Rs.10,000, whichever is less Recent changes in stamp law

  32. Probate of Will – Levy of FeeSection 51 of Rajasthan Court Fees & Suits Valuation Act, 1961 Recent changes in stamp law

  33. Conversion of Firm into Company underPart IX of the Companies Act • Section 575 of Companies Act, 1956: All property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration in pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein. • Whether there arose any “transfer” on registration of a firm as a company under the Income tax Act, 1961? Recent changes in stamp law

  34. Conversion of Firm into Company underPart IX of the Companies Act • The Bombay High Court in the case of Texspin Engineering & Manufacturing Works, 263 ITR 345 held that there was no transfer of assets on such incorporation. • The ITAT also in the cases of Well Pack Packaging, 78 TTJ 448 (Ahd.) and Krishna Ind. 82 TTJ 575 (Del) held that no transfer arose on such registration. • The Andhra Pradesh High court in the case of ValliPattabhiRaovsRamanuja Ginning and Rice Factory (P) Ltd. 60 Comp Cases 568 (AP), held that no liability arose under the Registration Act on incorporation under Part IX of the Companies Act. • Conclusion: The incorporation of the firm as a company under Part IX of the Companies Act will not be termed as a conveyance (transfer of assets) Recent changes in stamp law

  35. Important amendments in the Rajasthan Stamp Act, 1998 Recent changes in stamp law

  36. Changes in stamp law Recent changes in stamp law

  37. Changes in stamp law Recent changes in stamp law

  38. Changes in stamp law Recent changes in stamp law

  39. Changes in stamp law Recent changes in stamp law

  40. Changes in stamp law Recent changes in stamp law

  41. Changes in stamp law Recent changes in stamp law

  42. Changes in stamp law Recent changes in stamp law

  43. Changes in stamp law Recent changes in stamp law

  44. Changes in stamp law Recent changes in stamp law

  45. Changes in stamp law Recent changes in stamp law

  46. Changes in stamp law Recent changes in stamp law

  47. Changes in stamp law Recent changes in stamp law

  48. Changes in stamp law Recent changes in stamp law

  49. Other important changes • Registration charges • Release of ancestral property or part thereof is made by or in favour of brother or sister (children of renouncer’s parents) or son or daughter or son of predeceased son or daughter of predeceased son or father or mother or spouse of the renouncer or the legal heirs of the above relatives. (Earlier it was only when the release was in favour of brother or sister or son or daughter or father or mother) 1% subject to maximum of Rs. 500 Recent changes in stamp law

  50. Determination of rates for assessment of MVNotification No. F.5(1)FD/Tax/11-10 dated 08-May-2012 The following rates for different categories of land shall be applicable in all cases where DLC rates for such categories of land have either not been recommended or such DLC rates are less than the following prescribed rates. Recent changes in stamp law

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