Legal Question in Banking Law in India

21.02.2017

Dear Madam / Sir,

Stamp duty is payable on registration of property on the basis of the fair rateable value of the locality wherein the property is situated anywhere in India. To cite an example to explain your query, if the property was acquired in the year 2008 and the fair market value of the property in the Ready Reckoner at the time of acquisition of the property in 2008 was say Rs, 25,00,000 and the prevailing Stamp Duty rate in 2008 for that property was say 5%, the purchaser of the Property (Owner) remains liable to pay a Stamp Duty of Rs, 1,25,000/- thereon. The Owner had mortgaged the property to avail of a business loan from the Bank then. Thereafter, say in the year 2015, the fair market value of the same property in the Ready Reckoner is Rs. 56,00,000/-, and the Owner wishes to avail of a top up loan against the property in 2015, the Owner remains liable to pay additional Stamp Duty on the differential in fair market value due to property appreciation and value enhancement. So, if the applicable Stamp Duty rate as per the Ready Reckoner for that locality in the year 2015 is 8%, the Owner remains liable to pay the Stamp Duty of 8% on the differential amount Rs.56,00,000/- minus Rs. 25,00,000/- i.e Rs, 31,00,000/- which works out to Rs. 2,48,000/- less applicable and prevalent deductions and concessions will apply.

Regards,