Have you claimed Stamp Duty Set Back ?

By Accommodation Times News Services

Stamp duty setback allowed

tax1By Vimal Punmiya, Chartered Accountant

Important amendment with regard to factual position under the Bombay Stamp Act, 1958 relating to the provisions of investment : –

By virtue of ordinance no. Mah. Ord. II of 2005 dated 7th May 2005 wherein, a new article is introduced namely 5(g-d) (ii) :-

“(ii) if relating to the purchase of one or more units in any scheme or project by an investor from a developer Same duty as is leviable on conveyance under clause (a), (b), (c), or (d), as the case may be of Article 25 on the market value of the unit”

For the purpose of this clause, the investments in the unit shall include a flat, apartment, tenement, block or any other unit by whatever name called, as approved by the Competent Authority in the building plan.

By virtue of above amendment in the said Article, the purchase would get a set off of Stamp Duty to the extent of the amount of Stamp Duty paid by the seller, on the second document of conveyance made by the purchaser and if no duty is required to be paid, then the minimum duty for the conveyance shall be Rs. 1,000/-. The said amendment can be explained with the help of an illustration which is as under :-

1) Mr. A who purchased a Flat for Rs. Lacs whereby, Stamp Duty paid by Mr. A on the consideration of Rs. Lacs was Rs. 33,750/- as per the rates applicable under the Bombay Stamp Act, on conveyance of the said flat within three years, when Mr. B purchases said flat for Rs. 112 Lacs consideration then Stamp duty payable by Mr. B on 11 lacs consideration would be Rs. 38,750/- but, Mr. B would be liable to pay only Rs. 5,000/- as he would get a set off of Rs. 33,750/- which is duly paid by Mr. A initially on the Agreement duly entered by him/.

However, alternatively if Mr. A, sells the said flat to Mr. B, for Rs. 10 Lac only then, although the Stamp duty of Rs. 33,750/- has already been paid by Mr. A, then, on the second transaction, Mr. B would be liable to pay only Rs. 1,000/- as the consideration involved is same.


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