The Karnataka Stamps (Amendment) Bill of 2023 was successfully passed during the Belagavi Winter Session on December 11 which proposed a hike in the Stamp duty. Revenue Minister Krishnabyre Gowda has acknowledged that only 10% of the income is generated from stamps in the registration department. In response, he has decided to revise this, while also implementing measures to prevent any potential leakage.
The amendment bill will result in an increase in stamp duty for various legal documents such as power of attorney, deeds, and affidavits. These stamp duties, along with registration fees, play a crucial role in generating revenue for the state government. The government’s target is to collect Rs.25,000 crore through these means in the current financial year.
The revised stamp duty rates have been outlined in the bill. For instance, the stamp duty on adoption deeds will be raised from Rs 500 to Rs 1,000. Affidavits, which currently incur a stamp duty of Rs 20, will see an increase to up to Rs 100 in the future.
It is worth noting that stamp duties in Karnataka have remained unchanged since 1970. However, with the new amendment, the stamp duty on power of attorney will be increased from Rs.100 to Rs.500. Additionally, if a power of attorney is jointly issued by more than five but less than 10 individuals, the stamp duty for the same will be raised from Rs.250 to Rs.1,000.
Furthermore, the proposed amendment suggests an increase in stamp duty for property partition deeds in urban areas from Rs 1,000 to Rs 5,000 per share. For properties located outside city limits, the stamp duty will be raised from Rs.500 to Rs.3,000 per share. Lastly, for agricultural property partitions, the proposed stamp duty increase is from Rs 250 per share to Rs 1,000 per share.
The proposed changes in stamp duty regulations will have significant implications for various legal processes. Firstly, the stamp duty on divorce papers will see a substantial increase from Rs 100 to Rs 500. Similarly, the stamp duty for certified copies will also be raised from Rs 5 to Rs 20. Additionally, the registration of trusts will become more expensive, and fees for company mergers and other procedures will also witness an increase.
In the case of company amalgamations, the proposed amendment suggests 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, with a maximum limit of Rs 25 crore for such transactions.
Furthermore, for property partitions converted for non-agricultural purposes in urban areas, the anticipated escalation in stamp duty is expected to rise from Rs 1,000 per share to Rs 5,000 per share.
The bill also proposes revisions in stamp duty for certified copies of various documents and divorce papers. The stamp duty for certified copies will be raised from Rs 5 per copy to Rs 20, while those currently available for Rs 10 will cost Rs 50. Similarly, the stamp duty for divorce papers, currently set at Rs 100, will be increased to Rs 500.