The stamp duty you have paid while registering the agreement shall be deducted while collecting stamp duty from you during registration of sale deed

Article 5e(11) specifically applies when an agreement relates to transfer of immovable property for consideration viz. agreement to sell, development agreement or assignment agreement.  The usual rate of stamp duty is 0.5% of the market value / consideration. 

In some states namely Maharashtra the stmnp duty now paid will be adjusted agaisnt the stamp duty payable at the time of registration of conveyance deed. 

However in states like Tamilnadu and Karnataka adjustment may be restricted or not allowed. The assignment agreement or sale agreement is considered as a separate instrument attracting its own duty. 

If your state does not allow the adjustment then you may have to end up paying both  0.5% on the assignment agreement plus full stamp duty on final conveyance. 

The bank is not the authority to decide about the prevailing law.

The builder's lawyer is correct in his opinion about the prevailing law in Karnataka in this regard

When any instrument is executed  in part, stamp duty paid on first instrument will be adjusted against stamp duty charged on final instrument. That is the  established law. There are many judgements on the point. 

Yes it will be adjusted with the stamp duty

• Under the Karnataka Stamp Act, stamp duty paid on an assignment/transfer of rights agreement (Article 5(e)(ii)) is independent of the stamp duty payable on the sale deed/absolute conveyance.

• The 0.5% duty you paid on the assignment is not adjustable against the final stamp duty at the time of sale deed registration. Both instruments attract separate duties because they are treated as distinct transactions in law.

• Banks often assume it will be “set off,” but in Karnataka practice, sub-registrar offices insist on full stamp duty again at registration of the sale deed.

• Only in a few limited cases (like cancellation/re-execution of the same instrument) can credit of earlier duty be given, not in assignment-to-sale situations.

The 0.5% stamp duty on the Assignment Agreement under Article 5(e)(ii) of the Karnataka Stamp Act is separate and final. It cannot be adjusted against the 5% stamp duty payable on the Sale Deed. Adjustment is allowed only for an Agreement to Sell with possession (Article 5(e)(i)), not for an assignment.

So, full stamp duty will again be payable at registration. The builder’s lawyer is right, the bank is mistaken.

Dear Client,

In your case, the 0.5% stamp duty you already paid on the assignment agreement under Article 5(e)(ii) of the Karnataka Stamp Act is legally a separate duty for transfer of rights under an agreement and cannot be adjusted against the regular stamp duty payable on the sale deed/registration, which is treated as a conveyance under Article 20; therefore, at the time of registration you will still need to pay the full applicable stamp duty on the sale deed, and while banks sometimes assume adjustment is possible, the registering authority will not accept that interpretation, so the practical way forward is to treat the 0.5% already paid as a standalone obligation and be prepared to pay full duty on final registration to avoid any legal or procedural hurdles.

I hope this answer helps. For any further queries, please do not hesitate to contact us. Thank you.