Stamp duty is a tax levied on certain legal documents and transactions, pays typically related to the transfer of assets or property rights. It is imposed by the government or relevant authorities and varies depending on the jurisdiction.
Why pays stamp duty?
Stamp duty serves as an essential source of revenue for the government. It is also to validate and legalize certain legal documents and transactions.
Applicable Documents and Transactions: Stamp duty may be applicable to various documents and transactions. Such as property purchases, lease agreements, loan agreements, share transfers, powers of attorney, and other legal instruments.
Property Transactions: One of the most common applications of stamp duty is in property transactions. When buying or transferring property ownership, such as land, houses, or commercial buildings, stamp duty is typically on the property’s market value. This is a consideration in the sale deed.
Buyer or Transferee Responsibility: In most cases, the buyer or transferee of the property or asset is responsible for paying the stamp duty. It is also typically a percentage of the transaction or the property’s market value.
Legal Obligation: Paying stamp duty is a legal obligation, and the documents or transactions subject to stamp duty are generally not legally enforceable until the duty is paid and the document is stamped or franked.
Rates and exemptions: The rates of stamp duty and exemptions or concessions vary across jurisdictions. Some jurisdictions may provide exemptions or reduced rates for certain categories. Such as first-time homebuyers, specific types of property, or certain types of transactions.
Stamp Duty Collection: Stamp duty usually collects the government’s revenue or tax department. Then a designated agency is responsible for administering stamp duty.
Enforcement and Penalties: Failure to pay the required stamp duty or provide the necessary stamping can result in penalties, fines, or even invalidation of the document or transaction. For more details, contact us.