By Vimal Punamiya, FCA, LLB
In respect of Tenants co-partnership co-operative societies, which are of the nature of “Flat
Owners Societies” in which the flats are acquired by the society from the builder on ownership
basis and thereafter Society is formed, and land is conveyed to the society and individual
members acquire ownership rights over the building and underneath the development rights.
This concept has been recognized under Bombay stamp Act as on the conveyance in favour of
the housing societies, stamp duty paid by the purchasers of flats on ownership agreements is
deducted from the stamp duty payable on the market value of the property transferred in favour
of the society as per proviso to article 25 of schedule 1 of Bombay Stamp Act.
Circular No. F.N. 4 / 28 / 68 – WT DT. 10.0.1969 AND 27.01.1969 explaining the provisions of
section 5(1)(iv), the Board clarify that flats vest with individual members of society and wealth
tax exemption will be available to individual members.