STAMP DUTY RELIEF

Stamp duty has been reduced on leave and licence agreements to some extent and refund of stamp duty is now possible on agreement to sell if the agreement is cancelled under certain circumstances as per the amended provisions. These amendments have been brought into effect from 12th April, 2010 by the Bombay Stamp (Amendment) Act, 2009 which has amended the relevant provisions of the Bomaby Stamp Act, 1958.
    The rates for stamp duty on leave and licence agreements for Mumbai in respect of residential premises are now as follows:
    Prior to the amendment the rate mentioned in (A) (see box) was Rs. 750/- and the rate mentioned in (B) was Rs. 1,500/- and the rate mentioned in (C) was Rs. 3,000/-. There has been no change in the maximum rate mentioned in (D) above.
    In case of non-residential premises, the stamp duty would be twice the amount of duty chargeable for residential premises as stated above. This provision is the same as it was prior to the amendment. Further no change is made to the maximum period on which the above rate is applicable, which is 60 months. It is provided that where such leave and licence agreement purports to be for a period exceeding 60 months with or without renewal clause, then the stamp duty on such instrument would be the same as leviable on lease.
    Section 48 of the Bombay Stamp Act, 1958 has also been amended which provides for time limit in case of refund of stamp duty. It is now provided that where an agreement to sell an immovable property is cancelled by a registered cancellation deed on the ground of dispute regarding the premises concerned, inadequate finance, financial dispute in terms of agreed consideration or afterwards found to be illegal construction
or suppression of any material fact, then the application for refund may be made within two years from the date of such registered cancellation deed.
    It is also inter alia provided in Section 48 that where stamp duty is paid on an agreement to sell immovable property under Article 25 of Schedule I, and which is presented for registration and if the seller refuses to deliver possession of the immovable property which is the subject matter of such agreement, then an application may be made for refund within two years of the date of the instrument. This provision has been in force prior to the aforesaid amendment.
(A) Where the amount of average annual rent plus the amount of security deposit or money advanced or to be advanced does not exceed Rs. 2,50,000 for a single term of 12 months. Rs. 600/- for every term of 12 months or part thereof.
(B) Where the amount of average annual rent plus the amount of security deposit or money advanced or to be advanced exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000 for a single term of 12 months. Rs. 1,200/- for every term of 12 months or part thereof.
(C) Where the amount of average annual rent plus the amount of security deposit or money advanced or to be advanced exceeds Rs. 5,00,000 but does not exceed Rs. 20,00,000 for a single term of 12 months. Rs. 2,000/- for every term of 12 months or part thereof.
(D) Where the amount of average annual rent plus the amount of security deposit or money advanced or to be advanced exceeds Rs. 20,00,000 for a single term of 12 months. Rs. 5,000/- for every term of 12 months or part thereof.
source : A Times of India Presentation. MUMBAI, July 17, 2010 TIMES PROPERTY