Adjustment of stamp duty paid on irrevocable POA towards sale deed
I am looking to buy property in layout which is BMRDA approved, Builder has entered into following transactions: 1. Agreement for sale with seller where there is no transfer of possession of property to buyer/builder. 2. Irrevocable power of attorney has been entered on same day to execute all the necessary acts for forming layout giving all such required rights to builder/buyer by seller. And stamp duty of 5lakh(approx) has been paid for such POA. 3. Subsequently after 4 months, the builder who was POA holder executed sale deed in favor of himself as buyer also (acting in dual capacity as transferror and transferee) and adjusted the whole stamp duty of Rs. 5lakh paid on POA towards the stamp duty of sale deed.
Whether the above said transaction holds good? please advise
Property locates in Bangalore.
Asked 8 months ago in Property Law from Bangalore, Karnataka
Stamp duty is state subject and varied from state to state
2) if there is provision in stamp duty act of Karnataka that stamp duty paid on POA shall be deducted from stamp duty payable on conveyance deed executed in respect of said property then builder can adjust the same
3) contact a local lawyer before you purchase flat
The stamp duty paid on any instrument preceding the execution of sale deed cannot be adjusted towards the stamp duty payable on the sale deed unless the stamp duty paid in the case of former instrument was in excess of what was required to be paid. So you must ascertain locally from the office of sub-registrar as to whether the stamp duty on POA was paid in excess or not.
1. Agreement of sale itself cannot transfer the possession of property by a owner to the builder, hence that is not a big concern.
2. The stamp duty would be towards registration of power of attorney deed in favor of the builder by the owner.
3. The POA selling the property in the capacity of vendor to himself who buys it in the capacity of the buyer is a legally valid transaction, the adjustment of the stamp duty is an issue to be clarified locally through the registrar's office about its validity.
4. You have to take a proper legal opinion after producing the copies of the relevant document with a local advocate before entering into a sale agreement with the builder.