The Karnataka Stamps (Amendment) Bill 2023, clearing the path for increased stamp duties, has been passed. Explore the revised rates affecting legal documents and the state’s revenue goals.
Karnataka Stamps (Amendment) Bill 2023: A Paradigm Shift in Stamp Duty
In a significant development, the Karnataka Stamps (Amendment) Bill 2023 sailed through the Belagavi Winter Session on December 11, ushering in a substantial hike in stamp duties. Revenue Minister Krishnabyre Gowda spearheaded this legislative move, aiming to address the current scenario where only 10% of the income is derived from stamps in the registration department.
Government’s Revenue Ambitions and Proposed Measures
The amendment bill, now successfully passed, strives to elevate stamp duties on various legal documents such as power of attorney, deeds, and affidavits. These stamp duties, coupled with registration fees, stand as pivotal contributors to the state’s revenue. The government aims to amass Rs. 25,000 crore through these channels in the ongoing financial year.
Revised Stamp Duty Rates Unveiled
Outlined in the bill are the revised stamp duty rates, breaking a status quo that has persisted since 1970. For instance, adoption deeds will witness a hike from Rs 500 to Rs 1,000, while affidavits, currently incurring a stamp duty of Rs 20, will see an increase to Rs 100.
Impact on Legal Processes and Property Transactions
The proposed changes extend beyond individual transactions to significantly impact various legal processes. Divorce papers, previously bearing a stamp duty of Rs 100, will now face a substantial increase to Rs 500. Certified copies, once priced at Rs 5, will see a raise to Rs 20, and those costing Rs 10 will be revised to Rs 50.
Amendments in Property Partition Duties
Specifically addressing property partition deeds, the bill suggests increases in urban areas from Rs 1,000 to Rs 5,000 per share, and for properties outside city limits, an elevation from Rs 500 to Rs 3,000 per share. Agricultural property partitions will see an increase from Rs 250 to Rs 1,000 per share.
Company Amalgamations and Urban Property Partitions
For company amalgamations, the proposed amendment indicates an increase in stamp duty from the current 3% of the company’s market value to either 5% or an amount equivalent to 1% of the value of the company’s shares, capped at Rs 25 crore. Urban property partitions converted for non-agricultural purposes are expected to see an escalation in stamp duty from Rs 1,000 to Rs 5,000 per share.
Conclusion and Way Forward
The amendment signifies a landmark shift in stamp duty policies in Karnataka, prompting reactions from various sectors. As the state moves towards implementing the revised rates, stakeholders anticipate a nuanced impact on legal proceedings and property transactions.