Mentoassociates.com – Legal Articles

a. For lease of residential property not exceeding 1 year=0.5% of (Average Annual rent +Security deposit),subject to a maximum of Rs 500/-.
b.For lease of commercial/industrial property not exceeding 1 year=0.5% of (Average Annual rent +Security deposit).
c.For lease exceeding 1 year but not exceeding 10 years=1 % of (Average Annual rent +Security deposit).
d.For lease exceeding 10 years but not exceeding 20 years=2 % of (Average Annual rent +Security deposit).
e.For lease exceeding 20 years but not exceeding 30 years=3 % of (Average Annual rent +Security deposit).
f.For lease exceeding 30 years or in perpetuity or for not a definite term =Same duty as conveyance for the total of (average annual rent plus security deposit) or the market value of the  property, whichever is higher.

The Government of Karnataka in its 2007-08 budget has introduced several changes in the stamp duty levied on various instruments .These are effective from 1-04-09.Some of them are discussed below:
1. Stamp duty on sale transaction of all immovable properties has been reduced form 7.5% to 6%.The cess on stamp duty will be 10% and surcharge for properties situated within corporation limits will be 2% and within village Panchayaths will be 3%.
2. Sale agreements not involving possession of property. Presently the stamp duty varies from Rs 10 to Rs 200/-.Now the same is increased to .25% of the value of the agreement.
3.  Joint Development Agreements: 1% of the value involved.
4. GPA for Joint development: 1% of the value involved.
5. Other GPAs: Rs 200/-(Presently Rs 100/-)
5. Lease
a. Up to 5 years: 1% on the value of security deposit and average annual rent
b. Above 5 years and  up to 10 years: 2% on the value of security deposit and average annual rent
c. Above 10 years and up to 30 years: 4% on the value of security deposit and average annual rent
d. For a period above 30 years : 6% of the market value.
5. For duplicate registration: Rs 500/-(Instead of Rs 50/-)
6. Release: 6% instead of present 2.5% and 3.75%

With the Stamp Duty on various instruments in Karnataka being on the higher side, people have a tendency to undervalue the market value of the properties for the sake of saving the stamp duty and registration fee. This is particularly in the case of instruments of conveyance, gift, exchange etc.The Deputy Commissioner of Stamps can on his own call for and examine an instrument to check the correctness of the market value of the property and also the duty payable on the market value. This suo moto power can be exercised by the Deputy Commissioner only within two years, from the date of registration of the instrument. Even if, the market value of the property shown in the instrument is equal to or slightly more than the guidance value,the Deputy commissioner has the power to call for and examine the instruments.The Deputy Commissioner normally issue a notice to the parties concerned  and after hearing them and examining the documents produced by the parties, he may pass an order determining the correct market value of the property, if according to him, the market value of the property was not truly set forth in the instrument. The Deputy Commissioner can also order the difference in the stamp duty to be paid by the person. If the person so directed does not pay the differential stamp duty within 90 days from the date of the order, interest is applicable at the rate of 12% per annum.

The registering officer who has the power to register a document has the power to communicate the esteemed market value of a property to the parties. If the parties are not ready to pay the communicated market value, he has the power to keep pending the process of registration and refer the matter to Deputy Commissioner for determination of the market value and the stamp duty.

 Any person aggrieved by the order of the Deputy Commissioner may prefer an appeal before the District judge within 2 months from the date of communication of the Deputy Commissioner’s order provided; he has deposited 50% of the difference in the amount of duties as determined by the Deputy Commissioner.

    All duties required to be paid by a person under the Karnataka stamp act along with the interest thereon may be recovered by the Deputy commissioner by distress and sale of the movable property of the person from whome the same are due or by any other process for the time being in force for the recovery of arrears of land revenues.