An article about " KARNATAKA STAMP [AMENDMENT] ACT, 2009 "

KARNATAKA STAMP [AMENDMENT] ACT, 2009

Recently the government of Karnataka has amended the Karnataka Stamp Act, 1957 imposing stamp tax on governments to sell at 0.25 [point two five] per cent that is incredibly abnormal and not matching with the stamp tax levied in alternative neighboring States. The revised rates are effective from first Apr, 2009.

Article 5(e)(ii) under Schedule to change Act, 2009 is relevant here and it deals with the governments or memorandaum of agreements relating to sale of immobile property whereby possession of the property isn't delivered and in keeping with that the stamp tax collectible would be 0.25 [point two five] rupees for every one hundred rupees or half therefrom on the value adequate to the number of consideration. Thus, for Associate in Nursing agreement to sell of the value of the property of s.50,00,000/-., the stamp tax collectible would be Rs.l2,500/- whereas before this change the optimum stamp tax collectible was only Rs.200/-. within the neighboring State of state, the stamp tax collectible on governments to sell is merely Rs.1 0/- no matter the number of sale consideration. 

On the premise of the agreement to sell, usually the purchasers of immobile property would approach the banks for housing loan. Banks do impose payment of stamp tax at the prevailing rates for considering the application since under-stamped agreements to sell aren't enforceable in a court of law. Therefore, the house loan borrowers are compelled to first spend cash on stamp tax on agreement to sell, then approach banks for housing loans. If the cope with the vendor fizzles out, the number spent by the customer towards payment of stamp tax for agreement to sell would go waste since there is no provision for getting refund of stamp tax paid in such circumstances. However, for obvious reasons, a number of the property developers are still paying stamp tax for agreements to sell only at Rs.200/ - that isn't correct. 

In view of its abnormality, prevailing global economic recession and the weakened getting capability of the borrowers, the government of Karnataka may examine the matter afresh and revert back to the previous block system of payment of stamp tax with optimum duty of Rs.200/- for agreements to sell where possession of the property isn't delivered to fall in line with alternative southern States.