Like many other places in the country, in Delhi too the prices of most of the properties are quoted so that less stamp duty is charged, but in the capital the government has started cracking down on these efforts. Officials said that to prevent undervaluation of properties and ensure that the government gets the right amount of stamp duty, the revenue department has directed all sub-registrars and joint sub-registrars to closely scrutinize the property registration process. If the price of someone’s declared property is less than the circle rate, then action should be taken to recover the short amount. Especially in cases where basements are also included in residential areas.
Circle rate is the minimum price fixed by the state government, below which no property can be bought or sold. Whereas stamp duty is imposed to register the property, such as any kind of agreement or transaction document between 2 or more parties, which is registered with the Registrar.
Circular issued after High Court order
The circular issued by the office of the Divisional Commissioner outlines the procedure to be followed under Section 47-A of the Indian Stamp Act, 1899; This applies to cases where the property appears to be undervalued.
Officials also said that this circular has been issued after a recent order of the High Court. According to the circular, under the Delhi Stamp (Prevention of Under-valuation of Instruments) Rules 2007, owners will have to clearly declare both the plinth area and built-up area (total physical footprint) of the property. Besides, stamp duty will also be calculated on the basis of these values, which will also include the construction cost.
Property value reduced due to wrong calculation
The circular issued by the department also said, “In case of partial sale of a property, the actual valuation of the property sold will be in proportion to the plinth area, and the stamp duty will also be determined accordingly.” Whereas on most of the occasions it is seen that the stamp duty is wrongly calculated on the maximum plinth area instead of the actual built-up area, which reduces the value of the property.
According to the circular, “In particular, some problems have been observed in cases related to registration of basements of residential properties. In these cases, the price mentioned in the document has been found to be less than the valuation as per the circle rate applicable in the area.” Amid concerns about people under-reporting property prices to save stamp duty, the Revenue Department has directed sub-registrars to inform the parties concerned in writing, when they register a property, that if the declared property price is less than the official circle rate, they are paying less than the required amount.
Will get a chance to correct the document
The department also said that the people concerned will be given an opportunity to modify and correct the document, so that the correct valuation of the property as per the circle rate is shown and if any stamp duty is falling short, it can be paid.
It also said, “If the party concerned fails to amend the document and does not pay the required stamp duty as per circle rate assessment, the Sub-Registrar and Joint Sub-Registrar will register the document with a remark mentioning the deficiency and send the registered document to the Stamp Collector to determine the true market value and appropriate stamp duty.”
Officials said that the stamp collector has also been instructed to settle such cases within 3 months of receiving the documents. According to the circular, “After receiving the documents, the stamp collectors will proceed with their process as per law so that the true market value can be assessed and any shortfall in stamp duty can be recovered.
“Proceedings under Section 47-A of the Indian Stamp Act, 1899 (as applicable to Delhi) shall, ordinarily, be disposed of within a period of 3 months from the date of receipt of the document by the Stamp Collector.”
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