• 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 12 days ago in Property Law
Religion: Other

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7 Answers

The averments in that agreement is important and not the nomenclature 

Prashant Nayak
Advocate, Mumbai
32093 Answers
183 Consultations

4.1 on 5.0

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 

Ajay Sethi
Advocate, Mumbai
94965 Answers
7576 Consultations

5.0 on 5.0

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.

T Kalaiselvan
Advocate, Vellore
85166 Answers
2222 Consultations

5.0 on 5.0

It is sufficient to prove payment of stamp duty 

Ajay Sethi
Advocate, Mumbai
94965 Answers
7576 Consultations

5.0 on 5.0

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.

T Kalaiselvan
Advocate, Vellore
85166 Answers
2222 Consultations

5.0 on 5.0

Yes you can ask for challan 

Prashant Nayak
Advocate, Mumbai
32093 Answers
183 Consultations

4.1 on 5.0

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.

Mohammed Shahzad
Advocate, Delhi
13377 Answers
199 Consultations

5.0 on 5.0

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