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Registration and stamp duty


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Registration and stamp duty

  1. 1. By Sri Lakshmi Corporate Legal Department Altacit Global, Chennai Office
  2. 2. <ul><li>The Registration Act 1908 </li></ul><ul><li>The Indian Stamp Act 1899 </li></ul>
  3. 3. Both the acts extend to the whole of India except the state of Jammu and Kashmir.
  4. 4. <ul><li>The main purpose for which the Act was to ensure registration of documents and information about all deals concerning land and other immovable properties. The Act provides for registration of other documents also, which can give these documents more authenticity </li></ul><ul><li>Note that this registration is entirely different from registration of charge done by Registrar of Companies under Companies Act. If the charge relates to immovable property, registration with Registrar under Registration Act and registration under Companies Act with ROC are both required. </li></ul>
  5. 5. <ul><li>Section 17 of the Registration Act 1908 details about the documents that are compulsorily registrable under the said Act. The partial list of such documents are given below: </li></ul><ul><li>instruments of gift of immovable property </li></ul><ul><li>non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property </li></ul><ul><li>non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest </li></ul><ul><li>leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent </li></ul><ul><li>on-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property </li></ul>
  6. 6. <ul><li>instruments (other than instruments of gift and wills) which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of a value less than one hundred rupees, to or in immovable property </li></ul><ul><li>instruments acknowledging the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest </li></ul><ul><li>leases of immovable property for any term not exceeding one year, and leases exempted under section 17 </li></ul><ul><li>instruments (other than wills) which purport or operate to create, declare, assign, limit or extinguish any right, title or interest to or in movable property </li></ul><ul><li>wills; and </li></ul><ul><li>all other documents not required by section 17 to be registered. </li></ul>
  7. 7. <ul><li>When a document is executed outside India, then it has to presented for registration within four months after its arrival in India on payment of the proper registration-fee and the Registering Officer on satisfaction shall accept such document for registration. </li></ul>
  8. 8. <ul><li>Every document mentioned in section 17, insofar as such document affects immovable property, and section 18, shall be presented for registration in the office of a Sub-Registrar within whose sub-district the whole or some portion of the property to which such document relates is situate. </li></ul>
  9. 9. <ul><li>Persons to present documents for registration: </li></ul><ul><li>Every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented at the proper registration office- </li></ul><ul><li>by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or </li></ul><ul><li>by the representative or assignee of such a person, or </li></ul><ul><li>by the agent of such a person, representative or assign, duly authorized by power-of-attorney executed and authenticated in manner hereinafter mentioned. </li></ul>
  10. 10. <ul><li>Time from which registered document operates: </li></ul><ul><li>A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. </li></ul><ul><li>Registered documents relating to property when to take effect against oral agreements: </li></ul><ul><li>All non-testamentary documents duly registered under this Act, and relating to any property, whether movable or immovable, shall take effect against any oral agreement or declaration relating to such property, unless where the agreement or declaration has been accompanied or followed by delivery of possession and the same constitutes a valid transfer under any law for the time being in force. </li></ul>
  11. 11. <ul><li>Effect of non-registration of documents required to be registered: </li></ul><ul><li>No document required by section 17 to be registered shall- </li></ul><ul><li>affect any immovable property comprised therein, or </li></ul><ul><li>confer any power to adopt, or </li></ul><ul><li>be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. </li></ul>
  12. 12. <ul><li>Subject to such rules and the previous payment of such fees as the State Government, by notification in the Official Gazette, prescribes in this behalf, all documents and maps and all registers of the documents, shall be open to the inspection of any person applying to inspect the same, and, subject as aforesaid, copies of such documents shall be given to all persons applying for such copies. </li></ul>
  13. 13. <ul><li>Stamp duty or tax is paid for the transaction performed by way of document or instrument under the provisions of the Indian Stamp Act and the applicable state stamp act in which the document is executed or brought from outside for acting upon the same in that state. </li></ul><ul><li>Under article 246 of the Constitution of India, stamp duties are mentioned in the union list and are levied by the union, but under article 268, each state in which they are levied, collects and retains the proceeds. </li></ul><ul><li>Stamp duty rates prescribed by parliament in the Indian stamp act 1899 on agreements, affidavit, articles of association of a company, partnership deed, lease deed, mortgage deed, power of attorney, security bond, etc., are applicable only for union territories. In case of states, the rates prescribed by individual states will prevail in those states. </li></ul>
  14. 14. <ul><li>Any instrument mentioned in the schedule I to Indian stamp act 1899, is chargeable to duty as prescribed in the schedule. The list includes all usual instruments like affidavit, lease, memorandum and articles of Company, bill of exchange, bond, mortgage, conveyance, receipt, partnership deed, etc. </li></ul><ul><li>All instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution. </li></ul><ul><li>Every instrument chargeable with duty executed out of India, and not being a bill of exchange or promissory note, may be stamped within three months after it has been first received in India. </li></ul>
  15. 15. <ul><li>The stamp paper used in lieu of the stamp duty should be in the name of one of the parties who have signed the documents. </li></ul><ul><li>If the stamp paper is purchased in the name of an advocate, chartered accountant, etc, then such instruments shall be treated as an instrument not duly stamped, and shall be inadmissible in evidence. </li></ul>
  16. 16. <ul><li>An instrument not duly stamped cannot be accepted as evidence by a civil court, an arbitrator or any other authority authorized to receive evidence. Therefore payment of proper stamp duty on instruments bestows legality on such instruments. </li></ul><ul><li>Any person who, with the intention to evade the stamp duty, executes or signs any instruments chargeable with stamp duty, without the same being duly stamped, shall, on conviction be punished with rigorous imprisonment and fine. </li></ul><ul><li>The act also empowers the authorities to impound the instruments which are not duly stamped. </li></ul>
  17. 17. <ul><li>Every person having by law or consent of parties authority to receive evidence, and every person in charge of a public office, except an officer of police, before whom any instrument, chargeable, in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same </li></ul>
  18. 18. <ul><li>Any person— </li></ul><ul><li>drawing, making, issuing, endorsing or transferring, or signing otherwise than as a witness, or presenting for acceptance or payment, or accepting, paying or receiving payment of or in any manner negotiating, any bill of exchange payable otherwise than on demand or promissory note without the same being duly stamped; or </li></ul><ul><li>executing or signing otherwise than as a witness any other instrument chargeable with duty without the same being duly stamped; or </li></ul><ul><li>voting or attempting to vote under any proxy not duly stamped; </li></ul><ul><li>shall for every such offence be punishable with fine which may extend to five hundred rupees. </li></ul>
  19. 19. <ul><li>Schedule I of the Act details the stamp duty to be paid on various Documents / Instruments </li></ul>
  20. 20. <ul><li>IP instruments which purport transfer, be it in the form of licenses, assignment, sale, etc., come under the purview of the Indian stamp act, 1899 are subject to stamp duty. </li></ul><ul><li>The instruments have to be drafted prudently to ensure that the same is not inadvertently subjected to stamp duty. </li></ul><ul><li>If there are several instruments for one transaction stamp duty is payable only on one instrument, on the accompanying instruments nominal stamp duty shall be paid. </li></ul><ul><li>Payment of stamp duty for instruments which encompass intellectual property related to India and whose transfers need to be effected in India, can be made by using stamp paper. </li></ul><ul><li>Instruments executed in India must be stamped before or at the time of execution. An instrument executed outside India can be stamped within three months after it is first received in India. </li></ul>
  21. 21. <ul><li>While assigning values to the sale of trademark or while transferring the ownership, sufficient diligence should be exercised, otherwise the Registrar of Trademarks, if for reasons believe that the market value of the trademark has not been truly set forth in the assignment deed: </li></ul><ul><li>Can impound the document under Rule 72 of the trademark rules 2002; </li></ul><ul><li>The Registrar shall then refer it to the collector to determine the market value and applicable stamp duty under section 47 of the Indian stamp act, 1899. </li></ul>
  22. 22. <ul><li>Instruments relating to sale of copyright under section 18 of the Indian Copyright Act 1957 are specifically exempt from stamp duty. </li></ul>
  23. 23. <ul><li>Commercialization of intellectual property is strongly influenced by assignment and transmission. These in turn are influenced by the stamp duty payable on the actual consideration of the conveyance. </li></ul><ul><li>The conveyance deed is required to be attached with the application sent to the concerned authority for recording the assignment and transmission. </li></ul>