• Whether Company can gift flat to Director? What is the stamp duty?

I would like to know whether a company can Gift flat to its Director who is going to retire?  what is the stamp duty impact for the same in Karnataka?

I would like to know whether a company can transfer flat to its Director who is going to retire for a nominal amount ?  what is the stamp duty impact for the same in Karnataka?
Asked 11 months ago in Property Law from Bangalore, Karnataka
Religion: Hindu
1. Gift can not be for a nominal amount. Gift is out or love and affection without any consideration,

2. In the instant case such gifting will be treated as remuneration and income by the Income Tax Department,

3. The stamp duty and Registration fee will be as per the rule prevailing at Karnataka and also will depend on the Value of the Flat.
Krishna Kishore Ganguly
Advocate, Kolkata
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233 Consultations
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company can execute gift deed in favour of director 

stamp duty is a state subject and varies from state to state . 
Ajay Sethi
Advocate, Mumbai
23353 Answers
1222 Consultations
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1) under karnataka stamp act Art. 28.deals with  Gift Instrument of not being a settlement (No.48) or will or transfer (No.52).

(a) Where the donee is not a family member of the donor.

The same duty as a Conveyance (No.20) for a market value equal to the market value of the property which is the subject matter of gift;

2)it appears to be 8%of value of property as per information available on govt of karnataka website
www.karunadu.gov.in/karigr/modeldeeds/giftd.htm
Ajay Sethi
Advocate, Mumbai
23353 Answers
1222 Consultations
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1. The stamp duty will depend on the value of the property being transferred,

2. for ascertaining value of the Flat as per the Govt. present valuation,  a query sheet has to be submitted before the registrar's office seeking valuation of the property and the stamp duty and registration fees to be deposited with the Registrar,

3. The amount of stamp duty and registration fees can only be informed after coming to know about the present circle rate (present value) of the property.. 
Krishna Kishore Ganguly
Advocate, Kolkata
12131 Answers
233 Consultations
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Hi, You have to pay the stamp duty as market value i.e 5.60 %+ 1% total 6.60% on the market value of the property.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
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Yes this can be done. The expression 'gift' connotes giving something out of love and affection without consideration. The stamp duty can be told only by a Karnataka based lawyer.
Ashish Davessar
Advocate, Jaipur
18183 Answers
449 Consultations
5.0 on 5.0
(1) If the property gifted is situated within the limits of City Corporation area or in the Municipal Area in the State of Karnataka, the Stamp duty payable on Rs.1,00,000=00 value of the property is as follows:-

1    8% Stamp duty on Rs.1,00,000=00.          Rs.8,000=00

2  5% Additional Stamp duty on Rs.8,000=00.   Rs. 400=00

3  2% Surcharge duty on Rs.8,000=00     Rs. 160=00

Total Stamp duty payable  Rs.8,560=00  

In Karnataka state use of Judicial and Non-judicial stamp papers discontinued w.e.f. 1-4-2003.

Write document on Document Sheet or on plain paper.
Stamp duty can be paid in jurisdictional Sub-Registrar Office or in authorised Banks.

4  Registration fee @ 1% payable on Rs.1,00,000=00.   Rs. 1,000=00*
* (a) Plus copying, endorsement, comparing, filing, record of rights and postage fee also chargeable.

(b) Registration fee can be paid in cash or through D.D. in the concerned Sub-Registrar Office at the time of presentation of the document for registration.

Grand total of payment of Stamp duty and Registration fee   Rs.14,500=00




2. If the property gifted is situated within the Taluk Panchayath Area, the Stamp duty payable on Rs.1,00,000=00 value of the property is as follows:-

1

10% Stamp duty on Rs.1,00,000=00.

Rs.10,000=00

2    5% Additional Stamp duty on Rs.10,000=00.   Rs. 500=00

3  3% Additional Stamp duty on Rs.1,00,000=00.  Rs. 3,000=00

Total Stamp duty payable   Rs.13,500=00

Stamp duty can be paid by purchasing Non-judicial Stamp papers from Government treasury or write document on plain paper and pay stamp duty in cash or through D.D. in the concerned Sub-Registrar Office.

4   Registration fee @ 1% payable on Rs.1,00,000=00.    Rs. 1,000=00*

* (a) Plus copying, endorsement, comparing, filing, record of rights and postage fee also chargeable.

(b) Registration fee can be paid in cash or through D.D. in the concerned Sub-Registrar Office at the time of presentation of the document for registration.

Grand total of payment of Stamp duty and Registration fee   Rs.15,500=00

A notification oppose to public policy has been given in detail in the notification given below:
NOTIFICATION u/s 22A of the Registration Act, 1908
(Opposed to Public Policy)
NOTIFICATION
[Notification No. RD 56 munosa 99 dated 10-5-1999].
T Kalaiselvan
Advocate, Vellore
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