As a buyer or seller in a property transaction, you may have come across the term “stamp paper” when going through the conveyance agreement. But what is a stamp paper, and why is it required?
A stamp paper is a legal document that holds monetary value and is used to authenticate legal agreements. In India, stamp papers are issued by the government in various denominations, and each denomination indicates the maximum value for which the stamp paper can be used.
A conveyance agreement is a legal document that transfers the ownership of a property from one party to another. It is a crucial document that outlines the terms and conditions of the transfer and establishes the legal rights and obligations of the parties involved. To make the conveyance agreement legally valid, it must be executed on a stamp paper of appropriate value.
The amount of stamp duty to be paid for a conveyance agreement varies from state to state, and it is generally based on the value of the property being transferred. Stamp duty is calculated as a percentage of the property`s value, and the stamp paper used for the conveyance agreement must be of a value that is equal to or greater than the stamp duty payable.
In some states, the stamp duty payable for a conveyance agreement is fixed, regardless of the property value. For example, in Delhi, the stamp duty for a conveyance agreement is Rs. 200 for properties valued up to Rs. 5 lakhs, and Rs. 1,000 for properties valued above Rs. 5 lakhs.
It is important to note that the stamp paper used for the conveyance agreement must be purchased in the name of one of the parties involved in the transaction. The stamp paper must be signed by the parties involved, along with two witnesses who can attest to the signing.
In conclusion, stamp paper is crucial for a conveyance agreement as it establishes the legal validity of the document. The stamp paper used must be of appropriate value, and the stamp duty payable must be calculated based on the property`s value or the state`s fixed rates. If you are involved in a property transaction, ensure that the conveyance agreement is executed on a stamp paper of the correct value to avoid any legal issues in the future.