Maharashtra's Stamp duty amnesty scheme may benefit housing societies

The state governmentrsquos Stamp Duty Amnesty Scheme starting from December 1 that has a provision to waive penalty up to 400 per cent on registered or unregistered documents will help cooperative housing societies complete the process of Deemed ConveyanceThe state cabinet had on November 29 decided to implement the scheme in Maharashtra between December 1 2023 to March 31 2024 wherein a provision has been made for exemption on stamp duty and penalty for registration of deeds executed from 1980 to 2020 Inspector General of Registrations and Controller of Stamps IGR Hiralal Sonawane held a meeting with all the officials in the state to explain to them the modalities of implementing the schemeIGR Sonawane said ldquoAs per the cabinet decision people who want to regularise their unpaid or underpaid stamp duty can avail the benefit by approaching the nearest stamp office where a separate cell has been set up The valuation of exact stamp duty will be calculated on receiving the application and on payment of the stamp duty the documents would be stampedrdquoAnother Revenue official said The private public and listed companies whose amalgamationsdemergers are sanctioned by National Company Law Tribunal NCLT can also avail the benefit under the amnesty scheme The only rider is that the document should have been executed the NCLT order should have been passed before December 31 2020 There are many companies who have not paid the stamp duty and can avail the benefit under the said scheme as the penalty might have piled up up to 400 per cent over the unpaid stamp dutyBenefit housing societiesWelcoming the amnesty scheme Ramesh Prabhu chartered accountant and founder chairman of Maharashtra Societies Welfare Association MahaSEWA said ldquoThis scheme will help societies to take benefit of Deemed Conveyance and also to regularise their documents which were not stamped sufficiently There are many agreements for sale Conveyance Deed and other documents not properly stamped as required under Maharashtra Stamp Act 1958rdquoAccording to Prabhu housing societies are not able to complete the process of Deemed Conveyance if any of the flat owners have not paid the appropriate stamp duty Prabhu said as per section 34 of Maharashtra Stamp Act if insufficient stamp duty is paid on certain documents they are not considered as evidence in the court of law He said in order to regularise such documents the beneficiary of the documents need to pay not only deficit stamp duty but also penalty on such deficit stamp duty amount at the rate of two per cent per month as the penaltyldquoThe penalty amount may be up to 400 per cent of the stamp duty which was a great burden on the people and therefore many defaulted in paying the deficit duty on such documents and thereby causing loss of revenue to the state exchequerrdquo he saidThrowing light on the possible conditions which may have led to payment of insufficient stamp duty advocate Vinod Sampat founder president of Registration Fee and Stamp Duty Payers Association said that professionals found a way to evade stamp duty by citing judgments as per which the agreement to sale didnrsquot create the right title and interest in the property Thus people inked their agreements on stamp duty payment of mere R20 which later increased to R100 This loophole was plugged by the state governmentldquoAs per section 50C of the Income Tax Act calculation of income tax depends on the market value of property as determined by the states stamp duty department Those who have not registered their agreements will come forward to register the agreement Even at the time of purchase of a flat buyers insist on payment of stamp duty on earlier documentsrdquo said SampatSampat said their association welcomed the amnesty scheme ldquoThe fine print of the amnesty scheme will be known when the gazette is published It will benefit persons who have earlier not paid stamp duty as now only a token penalty will have to be paidrdquo said SampatWord of cautionPrabhu has a word of caution ldquoThe documents must be executed on legitimate stamp paper purchased from an authorised stamp vendor of the department or from an authorised franking centre If the documents executed are found to be on bogus stamp paper or on the stamp paper sold through blacklisted stamp vendors after the Telgi scam beneficiaries of such documents will not be able to avail this schemerdquo40037Max penalty for stamp duty evasion