The Hindu : Tamil Nadu News : Stamp duty, registration fee cut for family property deals

Online edition of India's National Newspaper
Friday, Dec 24, 2004

Tamil Nadu

Tamil Nadu

Stamp duty, registration fee cut for family property deals

By K. Ramachandran

CHENNAI, DEC. 23 . The Government has brought down the stamp duty and registration fee for property and financial deals. The move is aimed at wooing more people to register legally transactions involving immovable property.

The Registration Department hopes that more transactions especially within a family towards settlement or release deeds, partition of property or dissolution of partnerships will be recorded in a proper format before a Registrar.

The stamp duty for registering a settlement, a release deed or property partition and dissolution of partnership will be one per cent (down from four per cent earlier) of the registering value.

The registration fee of one per cent will have a ceiling of Rs.2, 000 which, department officials say, is one of the lowest in the country.

Cost a deterrent

A senior official says release or settlement of property rights by an individual in favour of a family member or members or partitioning of immovable property within the family is done informally. Very few register these transactions because of the high cost. The property cost itself is high. There have been occasions of individuals paying Rs.3 lakhs for a settlement deed in favour of a son or daughter.

But the informal deals contain legal flaws and years later civil disputes arise. "So we decided to bring down the duty rates as also put a ceiling on the registration fee, hoping that more people will come forward to register the transactions within the family," says the official.

Similarly, for leases up to 30 years, the duty has been brought down to one per cent and for agreements up to 99 years, it is only four per cent of the total rent. The one-per cent registration fee will have a ceiling of Rs. 5,000.

Officials say the rationalisation of the duty structure (including the reduction of stamp duty for sale and conveyance deeds given effect to since November 2003 or for simple mortgages with effect from February 2004) is aimed at encouraging more people to register financial transactions involving property. This will also trigger more business activity in the real estate market and bring revenue for the department.

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