The averments in that agreement is important and not the nomenclature
Difference between Article 5 and Article 5(e)(ii)
We're working to change estamp of sale agreement due to recent changes to stamp duty in karnataka. The earlier estamp has document description as "Article 5 agreement relating to sale of immovable property" The new estamp has document description as "Article5(e)(ii) Agreement or its records or MOA - Sale of immovable property wherein part performance of the contract, pocession of the contract, pocession of the property is not delivered". The agreement is for purchase of under construction flat. What is the difference between Article 5 and Article 5(e)(ii)? Is it safe to sign? Is there any risk that Builder will not give pocession of flat we've chosen or Builder will change booked unit?
Asked 2 months ago in Property Law
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7 Answers
Article 5 e deals memorandum of agreement or agreement for sale of immovable property wherein possession of property is not delivered to you whereas article 5 deals with all agreement irrespective whether possession is delivered or not
you should sign the agreement for sale and have it registered
builder is bound to deliver possession of flat
Article 5 levies duty on an agreement or a memorandum of agreement.
Article 5(e)(ii), for agreements pertaining to sale of immovable property without delivery of possession, wherein the erstwhile cap of INR 20,000 has been removed, which is a change in the latest amendment to the stamps act of Karnataka
it would be required to be examined as to whether (i) possession is delivered under the agreement itself; and (ii) possession is agreed to be delivered under the document and if any of these 2 ingredients are present then stamp duty as required under Article 20 is to be paid.
This is a requirement which has to be complied while entering into any sale agreement.
Do a Builder receive a challan on purchase of eatamp for buyer for sale agreement? Our understanding is, Builder gets a challan and that should be given to us. In our case, we paid the Builder the stamp duty amount with which they'd procured estamp. Agreement for sale is signed. When asked builder about challan, the Builder says, challan is provided only when an individual purchases estamp. In our case, the Builder is procuring stamps via tie up (probably with bank issuing stamp?) And hence they don't provide challan on the buyers name. But Builder provided a receipt that we paid estamp charges. Which they're saying can be produced to the registrar along with sale agreement during registration. The sale agreement shows stamp duty paid by us ( buyers) - so is that sufficient or should I ask for Challan?
Asked 2 months ago
It is sufficient to prove payment of stamp duty
The builder is right that you will get challan only when you pay the stamp duty directly via estamp paper.
The builder had been doing all these registration works as a routine for all the buyers, he has mentioned about the payment of the stamp duty to the sale agreement and the sale agreement cannot be registered until proper stamp duty paid, hence your doubts in this regard is unnecessary.
Yes you can ask for challan
- Article 5 imposes a duty on any agreement or memorandum of agreement, and has no connection with possession.
- Whereas , If the Agreement under Article 5 is without possession , then the stamp duty shall be payable under the Article 5(e)(ii) of the Karnataka Stamp Act.
- Further, under Article 5(e)(ii) , the stamp duty would be charged at the rate of 10 paisa for every Rs.100/- or par thereof on the market value equal to the amount of consideration, and the maximum stamp duty payable is Rs.20,000/-.
- No, builder cannot change the unit after entering into this agreement
- Yes , after getting payment for stamp duty , an agreement will be executed and signed by both the parties.
- The E-stamp must be in the name of buyer, and since the stamp duty is showing that the stamp duty has been paid by the buyer , then it is sufficient.
