• Stamp duty on property purchased within 1 year of 1st sale from developer to seller

Dear Sir/Madam - I am in the midst of purchasing a resale flat in Thane, Maharashtra on which Stamp duty was paid on the sale agreement between Developer (Builder) and Seller (Flat Owner from whom I am buying the flat) in Dec. 2018.
Since, it is less than a year, I am being advised by Broker that "as per law, I am now required to pay 2% Stamp Duty only and 5% Stamp Duty paid earlier will be considered and my 7% Stamp Duty obligation will be deemed to have been met." The receipt of Stamp Duty in the seller's name will be given to me and also form part of resale agreement which I am registering now.
I have 2 queries -
1. Is this a legally valid interpretation of the situation above ?
2. To be safe, should I insist that I will pay the full 7% Stamp Duty and ask the Seller to subsequently claim refund of this 5% Stamp Duty ?
Thanks in Advance.
Swapneel
Asked 6 years ago in Property Law
Religion: Hindu

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14 Answers

Yes, there is no such options of 2% stamp duty within a year with the government.

 

There is possibilities that between builder and first owner only agreement to sale deed had happened and with you they will be performing final deed registration.

 

Better you can ask 7% receipt on your name as paid stamp duty by you i.e. Government receipt. Or you can stick to your 2nd point.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

1.  Stamp Duty once paid via a Registered Deed, is non-refundable, in any way.  Avoid falling into any Traps of such kind.

2.  Irrespective of earlier paid Stamp Duty, IF you are executing a new Deed, you are liable for 6% Stamp Duty + Registration Charges.  This is applicable for every NEW Registration of Sale-Deeds.  No Exemptions applicable, whatsoever.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

resale of a property within one year of buying it from a developer would result in the state collecting stamp duty only on the profit from the transaction

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Yre option 2 will be feasible

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

This is confirm that stamp duty paid on ATS shall adjust with sale deed but in your case this is 2nd sale.

Builder to seller and seller to you. Either the ATS had executed between you ans builder than broker was right.

If sub registrar ignore the fact than 2% stamp duty only payable. There will be no refund. Better go with 2%stamp duty.

In no case, difference stamp duty will pay to seller. Indirectly it may be evasion of stamp duty and in future if you sell the flat than this may get notice to sub registrar. At time you may ask to pay, so don`t pay anything to seller.

AND ask seller to get POA from builder to authorize him to sell the flat as through ATS ownership dose not trasfer, and actual owner is builder at present.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

no need to pay separate cheque to seller for difference in stamp duty 

 

there are no buyers for any property  at present and you can dictate your terms for purchase of property 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Yes you can pay the same through separate cheque

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

In case of Bombay Stamp Act where investor goes in agreement with the builder under this sub-clause 5(g-a)(ii) benefits are given to investors who sell their units within a period of one years. In such a case, for the sale by the investor, the amount of stamp duty paid by the investor is set off against the stamp duty payable by the subsequent Purchaser, though the minimum payable by much Purchaser shall be Rs.1 000.

Surprisingly however this benefit is not available to any investor who does not deal with a Developer 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

This mean someone purchased newly build property never occupied by any and if same property sold within 3 years to 2nd buyer entitle to benefit of previous Stamp Duty.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

1.  The stamp duty and the registration rules pertaining to state governments vary from each other, hence if the document writer is of this opinion, you may better clarify this from another writer and proceed if it is confirmed.

 

2. In my opinion, if the seller is executing the registered sale deed for the property proposed to be bought by you, then you may have to pay the applicable stamp duty for this purpose, hence better confirm the information told by the broker before proceeding.

 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

You were advised to confirm this situation from another broker or a document writer in the local before deciding about what is to be done on this because a plain reading of the clause or the rules may  not enable you to correctly interpret the law involved in this.

 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

What you have heard may be right becasue the applicable stamp duty on purchase of the property by a buyer afresh, has to be paid.

The seller may be executing the registered sale deed in your favor however the applicable stamp duty and the registration charges are to be borne by the buyer only.

 

T Kalaiselvan
Advocate, Vellore
89977 Answers
2492 Consultations

This is my response to you:

1. Since resell is within one year of purchase, the stamp duty will have to be adjusted as per reading of the article 5;

2. It is advisable that you approach the IGR website: http://igrmaharashtra.gov.in or call their toll free number;

3. You will get much better answer regarding the stamp duty payable from an authorized person;

4. You can also personally or through an agent the office of the sub-registrar to ascertain the true value;

5. Once the office does finalise on the same, pay the same via DD;

6. Consult a local lawyer and take steps.

Gowaal Padavi
Advocate, Mumbai
1919 Answers
5 Consultations

  1. As per the information mentioned in the present query, makes it clear that you have already paid part stamp duty and now wish to pay the rest of the duty.
  2. As the above mentioned manner to pay the stamp duty is acceptable as per law.
  3. You should not need to ask for the refund and then pay the whole as you can very well now pay the rest at the time of registration of the sale deed.

Sanjay Baniwal
Advocate, South Delhi
5477 Answers
13 Consultations

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