Stamp Duty for Agreement in Tamil Nadu: Understanding the Basics
If you are planning to purchase or sell a property in Tamil Nadu, it is crucial to have a clear understanding of stamp duty for agreement. Under the provisions of the Indian Stamp Act, 1899, stamp duty is levied on various types of documents, including property agreements. The stamp duty varies from state to state and is calculated based on the agreement value or the market value of the property, whichever is higher.
In Tamil Nadu, the stamp duty for agreement is governed by the Tamil Nadu Stamp Act, 1958. As per the act, the stamp duty for property agreements is 7% of the market value of the property. However, the government of Tamil Nadu has recently introduced a new system called “Guideline Value” to determine the market value of the property.
Guideline Value and Stamp Duty for Agreement
Guideline Value is the minimum value at which a property can be registered in Tamil Nadu. The government revises the guideline value every year based on the prevailing market rates of the area. The stamp duty for agreement is calculated based on the guideline value or the agreement value, whichever is higher.
For example, if the guideline value of a property is Rs. 50 lakhs, but the agreed purchase price is Rs. 60 lakhs, the stamp duty for agreement will be calculated on Rs. 60 lakhs. Therefore, stamp duty for agreement in this case will be 7% of Rs. 60 lakhs, which is Rs. 4,20,000 (rounded off).
The government of Tamil Nadu has made it mandatory for all property transactions to be registered with the Registrar of Assurances. The stamp duty for agreement must be paid at the time of registration of the property transaction. The buyer and the seller can either pay the stamp duty for agreement in equal shares or as per the terms of the agreement.
Consequences of Non-Payment of Stamp Duty for Agreement
Non-payment or underpayment of stamp duty for agreement can have serious consequences. The agreement will not be considered legally valid and cannot be used as evidence in court. Moreover, the parties involved in the transaction can face penalties and fines for non-compliance with the stamp duty regulations.
Conclusion
Stamp duty for agreement is an essential aspect of property transactions in Tamil Nadu. It is crucial to understand the calculation and the implications of non-payment or underpayment of stamp duty for agreement. Seeking the assistance of a qualified legal professional can help you navigate the complexities of property transactions and ensure compliance with the regulations.