Stamp Duty Is Not Payable If Wife Receives Flat In Divorce Settlement
An article researched and authored by Advocate Aarun Chanda
- It is common practice that if a wife receives a flat/land as part of divorce settlement, then the husband executes a gift deed in favour of the wife. In many states stamp duty on a gift deed executed by a husband in favour of his wife is lower then that payable on conveyance deed.
- The consideration involved for execution of a gift deed is natural love and affection of the doner husband for the donee wife. However, if there is a divorce proceeding involved between the husband and wife, there is no love and affection left between them and transfer of title cannot take place vide a gift deed.
- The general practice for transfer of flat/land is by way of execution and registration of settlement deed which attracts stamp duty payable on a conveyance deed, which is usually higher then that payable on a gift deed.
- All the liabilities of payment of taxes and duties to the government pass on to the new holder of title i.e. The wife. In exceptional cases, the revengeful husband with the sole intention of causing further financial loss and to cause mental trauma, to the ex-wife, write anonymous letters to the revenue authorities and then the revenue authorities demand deficit stamp duty from the wife.
- In the recent matter of Arun Rameshchand Arya Versus Parul Singh, the Hon’ble Supreme Court of India, has observed that, if a wife engaged in a matrimonial dispute receives a flat from her husband as part of divorce settlement, then she is exempted from payment of stamp duty in accordance with Section 17(2)(vi) of the Registration Act. The Hon’ble Supreme Court relied on the judgement of Mukesh v. The State of Madhya Pradesh & Anr.
- The Hon’ble Supreme Court of India directed the concerned Sub Registrar to register flat in the single name the wife.
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