Understanding the basics of Stamp Paper and Stamp duty.

Under the Bombay Stamp Act, 1958, 62 categories of documents need to be legitimised by 'stamping' them (paying stamp duty or a kind of tax to the government). There are 14 different varieties of stamp papers, available in 10 denominations. They are of two kinds: Judicial, used for legal and court work; non-judicial, used for registration of documents, insurance policies etc. 

Telgi used loopholes in the Act. He sold fake stamp papers for share transfers or insurance policies which do not have to be registered at the stamp department. 85 per cent of stamped documents (mainly property transactions) have to registered. 

Stamp Duty basically is nothing but a type of tax collected by the government under its jurisdiction for a transaction of property.

The types of property may be freehold or leasehold from land (agricultural and non-agricultural), independent houses, flats to commercial units. As a general rule, Stamp Duty is generally paid by purchasers. Also read: Having trouble in filing returns? Here's a checklist Stamp duty in India was first introduced by Britishers in 1899.

According to early rules, the Duty has to be deposited in the government treasury for all property transactions, which are done through document or instrument under the provisions subscribed in Indian Stamp Act of 1899 and Bombay Stamp Act of 1958.

The amount, collected by government-appointed Stamp collectors, would go directly to the concerned State under which the individuals are taxed. In many states still the Indian Stamp Act, 1899 is in force.

The percentage of stamp duty levied varies in different states. For example Maharashtra charges 6.5 percent of the property value as stamp duty if the property lies within the city limit, while in Tamil Nadu 8 percent Stamp Duty is collected for all types of property transactions. In this, 7 percent is levied as Stamp Duty and one percent as registration charges. Tamil Nadu government has introduced its own stamp duty law in May to simplify and streamline transactions of immovable properties and securities. States such as Gujarat, Karnataka, Maharashtra, Rajasthan and Kerala too have their own stamp law. Tamil Nadu’s Bill brought some significant changes to the Central law. For example, the addition of sister, brother, husband of predeceased daughter and wife of predeceased son within the definition of family. The central law states that family means father, mother, husband, wife, son, daughter and grandchild. For those who buy flats, stamp duty is calculated on the basis of the land parcel applicable to the purchaser in the multi-storey apartment. This is known as undivided share (UDS) of the property. For example, if the apartments made on 2400 sq ft having 10 equal sized apartments, each member has to pay for a stamp duty for 240 sq ft land. The size of UDS varies if the apartment sizes vary and largest portion will be allotted for those having large sized apartments.

Why should one pay stamp duty? As mentioned earlier, this is a tax inline with sales tax or income tax collected by the Government. Technically speaking, Stamp Duty for any property transactions is paid under Section 3 of the Indian Stamp Act, 1899. Stamp duty is payable in full and on time. If there is a delay in payment, it attracts penalty at the rate of two percent every month on remaining amount and as maximum penalty being levied 200 percent for the unpaid amount. Another advantage for paying stamp duty is that the document acquires evidentiary value and admitted in any court of law in India as evidence provided the documents are how to pay the stamp duty properly stamped.

How to pay stamp duty? Now the question comes, how to pay the stamp duty? Many states have simplified the payment procedure. For example in Maharashtra, one can pay the stamp duty online as the government has recently announced linking of all sub-registrar offices across the state for easy payment. Otherwise, stamp papers, equivalent to the value of the stamp duty, should be purchased in the name of one of the parties involved in the transaction. The amount will be paid at the sub-registrar office of the jurisdiction on or before the execution of the sale deed.

Though in India it has become a practice that only purchasers bear the cost of stamp duty, actually, it is either paid by a transferee or purchaser or as mutually agreed in the agreement between parties.

Sources, readings from the TOI and money control.com 

Happy learning & Growing!

Kunal 

Corporate Law Update: Mandatory e-filing of service tax return w.e.f 1st October, 2014

The Central Board of Excise and Customs have made the filing of service tax return filing mandatory in electronic mode for all the assesses w.e.f 1st October, 2014.

Therefore all the assesses are required to file the returns diligently making use of internet banking.

Provided that the department has given powers to the Assistant commissioner that if the commissioner thinks fit, he can exempt any assessee from filing the return electronically.

For White-Collar Legal,

Partner

Kunal

Annual Compliance by Companies in India 2014.

Here is one for the Corporate, 2014, Annual Filing

Every Company registered under the Companies Act 2013/1956 shall file following Forms:-

S. NO	FORMS	PURPOSE	DUE DATE	REQUIREMENTS
1.	GNL - 2	Appointment of Auditor (Under Section 139 (1))	15 Days from the Date of Meeting in which auditor is  Appointed.	·   ADT-1, ·   Resolutions ·   Appointment Letter
2.	20B	Filling of Annual Return (Under Section 92 (1))	60 Days from the Date of AGM	·   Annual Return
3.	23AC and 23ACA	Copy of financial statement to be filed (Profit and Loss accounts and Balance Sheets) (Under Section 137 (1))	30 Days from the Date of AGM	·   Notice of AGM ·   Board of Directors Report ·   Auditors Report ·   Audited Financial Statement
4.	MGT 14	Filling of Board Resolutions for Approval of Financial Statements (Under Section 179 (3)(G))	30 Days from the Date Approvals of Financial Statements	·   Board Resolutions

IMPORTANT NOTE:- (In Case of Non Filling or Delay Filling)

1. The Company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both;
2. Disqualifications for appointment of director u/s 164 (2)(A)
3. Winding up by the Tribunal;
4. Issue of Notice by the Registrar of Companies to declare as Dormant Company;
5. Additional Fees may attract for delay filling;