To prevent undervaluation of properties, bring transparency and ensure that the government receives the correct amount of stamp duty, the Revenue Department has asked all the sub-registrars to ensure strict compliance with procedures under Section 47-A of the Indian Stamp Act, 1899. “The instances of property undervaluation have been growing where people under-report property values to pay less stamp duty. To curb this, the government has issued directions to strictly implement rules as per the Indian Stamp Act . This will bring transparency as well as boost revenue for the government,” said a senior official. “In compliance with the directions of the High Court., the Revenue Department is required to issue a specific circular to sensitize all concerned authorities about the procedure to be followed under Section 47-A of the Indian Stamp Act, 1899, particularly in cases where the consideration set forth in the instrument is less than the fair market value as per applicable circle rates,” read a recent circular issued by the Revenue Department. Presently, under the Delhi Stamp (Prevention of Under-valuation of Instruments) Rules, 2007, the instrument must clearly specify both the plinth area and built-up area of the property and the stamp duty is to be calculated on the basis of these values, including the construction cost. “In the case of partial sale of property, the valuation shall be proportionate to the actual plinth area sold, and the stamp duty shall be determined accordingly. However, it is often observed that stamp duty is incorrectly computed on the maximum permissible plinth area instead of the actual built-up area, leading to undervaluation,” read the circular. The department also highlighted that they have observed issues particularly in relation to the registration of basements of residential properties, where the consideration mentioned in the instrument is found to be lower than the valuation as per the applicable circle rates. After observing these instances and following recent court directions, all sub-registrars and joint-sub registrars have been directed to issue notification to parties. “At the time of presentation of the instrument for registration, if the consideration stated is less than the circle rate-based valuation, the parties shall be notified in writing that the declared consideration and corresponding stamp duty are deficient . The parties shall be given an opportunity to revise and amend the document to reflect the correct valuation as per the circle rates and to pay the deficient stamp duty, if any,” the department said. In case the parties fail to amend the instrument and do not pay the requisite stamp duty as per the circle rate valuation, the sub-registrars and the joint sub-registrars have been directed to register the instrument with an endorsement regarding the deficiency and forward the registered documents to the collector of stamps for determination of the correct market value and proper stamp duty, said officials. “Upon receipt of the document, the Collector of Stamps shall proceed in accordance with law, including the provisions of Section 27 of the Indian Stamp Act, to assess the correct market value and recover any deficiency in stamp duty.Now, therefore, all the Sub-Registrars / Joint Sub-Registrars are directed to follow the above procedure for registration of documents / instruments of basement of residential properties for registration,” read the circular.
