Stamp duty on relinquishment ( release ) deed
BHUPAL SINGH
(Querist) 10 July 2013
This query is : Resolved
We have a small commercial office flat( one room )(presently rented out) of about 320 sq ft(super area)in Delhi(Category A area ). We were 4 co-owners ( myself, my wife & 2 sons, each 25 % share. After expiry of my wife my 2 sons inherited( as per her 'WILL') my wife's share in equal parts thus their shares became 37.5 % each. My one son has executed a Relinquishment Deed in my favour through an advocate practicing at Sub Registrar office complex, with a DD of Rs. 1100/- as registration fee as per the advice of the advocate, who said no Stamp Duty is to be paid in this case . The Sub Registrar has demanded Stamp Duty. My questions are--
A. Being transfer from son to father without any consideration, does it attract Stamp Duty ? If so, under What Sec of The Registration Act/Stamp Duty Act and will it charged on entire 37.5 % share or only
on 25 % share which original belonged to him. Will the inherited portion be exempt from stamp duty ?
B. How is the Stamp Duty to be calculated in this case. The room is a part of multistory building which is built on a plot located in Category A area of Delhi, where the Circle rates of commercial land are Rs.6,45,000/- per sq. mtr ?????
I will appreciate a your valued views/comments/advice in this case at the earliest.
Thanking you,
Bhupal Singh
Advocate Ravinder
(Expert) 11 July 2013
Point-A—Normally relinquishment in other cases will be 1% of the market value of the relinquished property. But, since your son is close blood related, the charges will be very nominal and lumpsum. I cannot say exactly, because it differs from state to state.
And the other question you were asking is whether 37.5% or 25%. Your son is the owner for 37.5%, it is his wish how much he has to relinquish, you have to ask him. Stamp duty will be charged on the property relinquished and not on the remaining property.
Point B—Let it be a part of multi storied buildings, the rules are same. Regarding rate, you have to enquire from the concerned sub registrar office.
BHUPAL SINGH
(Querist) 12 July 2013
My son has relinquished his complete share. The Question I asked is whether Stamp Duty is payable on entire share (i.e.37%)of my son or only on his original share (i.e.25%) and the inherited part is exempt from Stamp Duty ???
How is the Stamp Duty to be calculated ??
Is there any formula for it ?? Reading of the Stamp Duty Act indicates that the stamp duty is payable on value of the area as per the Circle Rate. Since this Office Room is a part of the multi-story building, how is the Stamp Duty to be calculated ? Will it be on the market value of the share of my son ???
BHUPAL SINGH
(Querist) 12 July 2013
Further to my above noted query , the property is lease hold. The original owner is the coy who have built the building. Secondly, it is transfer from son to father without any consideration. Hence ipso facto there is no sale involved. Thirdly at what rate and at what amount the Stamp Duty will be calculated. Your view that a small lump sum will be charged. This not laid down any where in the Stamp Duty Act. Fourthly, we had paid to MCD Stamp Duty @ 3 % of the cost ( as shown in agreement to sell document) at the time of transfer of the flat (office room)in the MCD records to our names.
Can you suggest some book or some Court judgement where in method of calculation is given with some illustration etc.
Shall be highly obliged for this favour.
With warm regards and best wishes,
Bhupal Singh
Advocate Ravinder
(Expert) 12 July 2013
Q. My son has relinquished his complete share. The Question I asked is whether Stamp Duty is payable on entire share (i.e.37%)of my son or only on his original share (i.e.25%) and the inherited part is exempt from Stamp Duty ???
A. Yes, stamp duty has to be paid on 37.5% (25% + 12.5%)
Q.How is the Stamp Duty to be calculated ??
Is there any formula for it ?? Reading of the Stamp Duty Act indicates that the stamp duty is payable on value of the area as per the Circle Rate. Since this Office Room is a part of the multi-story building, how is the Stamp Duty to be calculated ? Will it be on the market value of the share of my son ???
A. There are two types of market value (i) Open market value, this is not concerned with the market value of government rate. (ii) Govt rate, which will be fixed by the Govt and will be increased from time to time according to the development of the area. All the transactions are done according to the Govt rate only, they do not recognize or believe open market value. There will be a fixed format for Open land (before layout) calculated in Acres, Plots (after layout) calculated in Sq yds/sq mts, Flats, calculated in sq feet area. You case will come in this category.
Q.Secondly, it is transfer from son to father without any consideration. Hence ipso facto there is no sale involved.
A. Relinquishment is conveyance and right in the property will be transfered, it is equivalent to sale, the registration charges are 1% of the market value.
Q. Thirdly at what rate and at what amount the Stamp Duty will be calculated. Your view that a small lump sum will be charged. This not laid down any where in the Stamp Duty Act.
A. I am sorry I made a mistake. By mistake I told as lumpsum, this is in case of registered power of attorney but not in the case of release deed. The registration charges for relinquishment is 1%.
Q.Fourthly, we had paid to MCD Stamp Duty @ 3 % of the cost ( as shown in agreement to sell document) at the time of transfer of the flat (office room)in the MCD records to our names.
A. What is MCD pl. elaborate.
Q.Can you suggest some book or some Court judgement where in method of calculation is given with some illustration etc.
A. search Lawyerclubindia.
