Q1. What is the extent of application of the Bombay Stamp Act, 1958?
Ans - The Act applies to the whole of the State of Maharashtra.
Q2. What is an "Instrument" under the Act?
Ans - "Instrument" includes every document by which any right or liability is or purports to he created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt.
Q3. What are the consequences for not paying stamp duty on an instrument?
Ans - In case proper stamp duty is not paid on an instrument, the instrument is inadmissible as evidence.
Q4. Is there a penalty for not paying the requisite stamp duty?
Ans - Yes. Previously the penalty was an amount not exceeding 10 times the amount of the proper duty. As per the recent amendments, penalty of 2% per month on the proper duty for the period of default will be levied, subject to a maximum of 2 times the deficient portion of duty. Instruments are liable to be impounded till proper stamp duty is paid.
Q5. What is market value?
Ans - Market value in relation to any property which is the subject matter of an instrument means the price which such property would have fetched if sold in the open market on the date of execution of such instrument or the consideration mentioned in the instrument, whichever is higher.
The price which such property would have fetched if sold in the open market is determined on the basis of the Ready Reckoner issued each year. Depreciation in stamp duty is available for old buildings and building without lift.
Q6. In whose name should the stamp paper be purchased? If it is purchased in the name of an Advocate, can the client exercise the document?
Ans - As per Sec. 34 of the Bombay Stamp Act, the Stamp Papers should be in the name of one of the parties who have signed/who would be signing the instruments.
If the Stamp Paper has been purchased in the name of an Advocate, C.A., etc. then such instrument shall be treated as an instrument not duly stamped and shall be inadmissible in evidence.
Q7. Will Stamp Duty have to be paid if there is a deed of Family Settlement and a flat is transferred amongst family members?
Ans - Yes, as per the provisions of Bombay Stamp Act, Stamp Duty will have to be paid in such a case.
Q8. Is Stamp Duty payable on a gift or resale of a flat?
Ans - Yes. Stamp duty must be paid on instruments of gift or resale of a flat.
Q9. Is there a time frame within which the Stamp Paper must be used?
Ans - Yes. Stamp paper should be used within 6 months from the date of purchase. Any stamps not used within this period are invalid.
Q10. Is a refund possible if the Agreement has not been signed and the parties have paid the Stamp Duty?
Ans - When a person has stamp or stamps in his possession which have been spoiled or rendered unfit or the person does not require immediate use of the said stamps then such a person should deliver the above said stamps to the Collector.
In this case, the person is required to make an application within six months from the date of the purchase of stamps. Under Section 52 of the Bombay Stamp Act, the person should also submit the affidavit mentioning the reasons for which the Stamps were purchased and the reasons why the refund application is being made. If the applicant can convince the Collector then refund of the stamps could be obtained.
The stamps should have been purchased by such a person with a bonafide intention. None of the parties should have signed the paper on which the stamps have been fixed. On receipt of such application, the Collector is empowered to refund to the said person the value of said stamp deducing there from said amount as prescribed by the competent authorities.
Q11. In case of resale of the flat, who is required to pay the stamp duty- the purchaser or the seller?
Ans - The parties can decide who shall pay the Stamp Duty. As per Section 30 of the Bombay Stamp Act, if nothing is mentioned in the agreement and if the transaction relates to resale of flats then the Stamp Duty will have to be paid by the purchaser.
Q12. As regards the payment of Stamp Duty does the Law of Limitation apply to the purchase of flat in a Co-operative Society?
Ans - No, there is no law of Limitation applicable for purchase of flats in a Co-operative Housing Society unless such sale deed is registered with the Sub-Registrar of Assurances. If the Sale Deed is registered with the Sub-Registrar of Assurances then the law of Limitation prescribes eight years from the date of registration of the sale deed.
Q13. Will Stamp Duty have
to be paid as on a conveyance in case of resale of flat, if
the document has been executed prior to 10-12-1985 and the vendor
has not handed over possession of the flat to the purchaser?
Ans - No. The Stamp Duty will not have to be paid as on a conveyance if the transaction has occurred prior to 10-12-1985. It does not matter if the possession has been transferred by the document executed prior to 10-12-1985.
Q14. Who is liable to
pay Stamp Duty to the Buyer or the Seller?
Ans - Section 30, of the Bombay Stamp Act, 1958 states the liability for the payment of Stamp Duty. The liability of paying Stamp Duty is that of the buyer unless there is an Agreement to the contrary.
Q15. Is the decree of
final order of a civil court by which immovable property is
transferred liable to be stamped as a Conveyance?
Ans - Yes, the amendment of Article 25 of the Bombay Stamp Act has widened the definition of conveyance, in view of the amendment decree or final order of the Court, by which immovable property transferred, is liable to be stamped as a Conveyance.
Q16. Is there a procedure
for adjudication of stamp duty?
Ans - A person can seek the opinion of the Collector of Stamps by making an application to him for adjudication of stamp duty payable by such person on the instrument. For this purpose, the person who is a party to the instrument has to furnish a true copy of the instrument and an affidavit stating the facts and such other evidences as required, along with prescribed fee. The Collector's opinion is final and conclusive. No appeal lies against his order of adjudication.
Q17. When is Stamp Duty
payable on an instrument in Maharashtra?
Ans - All instrument are liable to be stamped before or at the time of execution of instrument or immediately thereafter on the next working day following the date of execution, when executed in the State of Maharashtra. Any instrument executed outside the state is liable to duty only on receipt of such instrument in the state, provided it relates to a property situated in the state, or a matter or thing to be done in the state. Stamp duty is not levied on a transaction, but on an instrument.
Q18. Who is required
to pay stamp duty and registration fee on purchase or lease
of a flat or office?
Ans - The purchaser (whether on first sale from a developer or on resale of a flat) or a lessee of a flat or office is required to pay stamp duty and registration fee.
Q19. What is the rate
at which Stamp Duty is payable?
Ans - Stamp duty is payable at the rate mentioned in Amendment Act, 2004 of the Bombay Stamp Act, 1958.
Q20. How is Stamp Duty
paid in Maharashtra?
Ans - Stamp duty above the value of Rs. 25,000 is payable by a pay order/ demand draft/cheque drawn in favour of "The Superintendent of Stamps, Mumbai". Alternatively, a pay order can be drawn in favour of "The Reserve Bank of India- A/c Stamp Duty, Mumbai". Stamp Duty up to the value of Rs. 25,000 can be paid in cash. A receipt is issued by the concerned office for the stamp duty amount.
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