Adjudication as to proper Stamp Duty
The process of valuing property, arriving at its market value
and ascertaining the proper stamp duty is called Adjudication.
For the purpose of assessing the Stamp Duty,
the Collector of Stamps under the Stamp Act shall determine
the true market value of such property if he feels that the
market value of the property which is the subject matter of
the instrument has not been truly shown therein.
Section 31 of the Bombay Stamp Act, 1958 provides for Adjudication
on instruments. The applicant under this section has to submit
an instrument executed or unexecuted and previously stamped
or not, for the purpose of opinion as regards its chargeability
of Stamp Duty to the Collector of Stamps. One can approach the
Collector of Stamps appointed in their District.
Adjudication law in India states that if the
instrument is not executed, the Collector will determine the
Stamp Duty payable, and intimate the same to the party liable
to pay the stamp duty. If it is executed but not properly stamped
then he may determine the deficient stamp duty payable.
Whenever a duly stamped and executed instrument of conveyance
etc. is presented for registration, the Collector can determine
the true market value of the property u/s 32A and accordingly
fix the stamp duty payable on advalorem basis.
Time of payment and penalty
When the instrument is brought to the Collector for Adjudication
and he assesses the Stamp Duty, the person is liable to pay
Stamp Duty within 60 days from the date of service of notice
of demand in respect of instruments which are submitted for
adjudication after their execution. Failure to do this within
the stipulated period of 60 days will impose a penalty at the
rate of 2% of the deficient portion of the stamp duty for every
month or part thereof from the date of execution of such instrument
on the person liable.
Cases of Signed and Unsigned documents:
Adjudication in India can be carried out both for signed as
well as unsigned documents. An adjudicated unsigned document
is valid up to six months from the date of Adjudication order
up to December 31 of that year whichever is earlier. In case
of a signed document, adjudication must be done within one month
or else a penalty of two percent per month will be levied from
the date of signature.
If the Agreement is signed before Adjudication, one has to pay
Stamp Duty with interest and penalty as applicable. However
in case of unsigned agreement, one may ignore the Adjudication
order and close the matter.
Whenever Stamp Duty is likely to be heavy, it is desirable to
take advance rulings and get the document adjudicated as to
the proper stamp duty payable and lodging it with the Registrar
for Registration. In fact if a document is unsigned and Collector
determines a very heavy amount, the parties may withdraw the
unsigned document and adopt some other lawful method to complete
the transaction.
Documents required at the time of Adjudication:
For adjudication one of the parties to the instrument can apply to the Collector of Stamps by writing an application and furnishing the following documents along with payment of the Adjudication fees. (The adjudication fee payable is Rs.100).
- Copy of Instrument: A true copy or an abstract of the instrument on which Stamp Duty is to be determined;
- Any such affidavit or other evidence as may be necessary to prove that all facts affecting the chargeability of the instrument have been truly set forth in the instrument;
- Details of the property pertaining which the Stamp Duty is to be determined.
If you want to reiterate you should go for replacement value insurance. It is obligatory to declare that insurance companies have covered both your home and its contents under replacement-value insurance.