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The Telangana government is set to amend the Indian Stamp Act and Registration Act to plug revenue leakages from property auctions by banks and financial institutions. Buyers of auctioned properties will now be required to pay full stamp duty on transaction value, ending the practice of using only a "sale certificate" to bypass payments. A new Section 22-B of the Registration Act will also empower officials to cancel fraudulent registrations made through forgery, impersonation, or double sales-authority currently limited to courts. The amendments, requiring presidential assent, align with measures in states like Andhra Pradesh and Tamil Nadu and are expected to safeguard revenue while curbing property fraud.
The Telangana administration has taken steps to amend the Indian Stamp Act and the Registration Act in an effort to curb significant revenue losses from property auctions conducted by banks and financial institutions. Under the proposed changes, buyers of auctioned properties will be compelled to pay stamp duty based on the complete transaction value rather than relying on loopholes that allow payment avoidance. Advertisement
At present, many buyers manage to evade proper duty payments by presenting only a "sale certificate," which banks submit to sub-registrars under section 89 of the Stamp Act. Sub-registrars are then obliged to record these in Book 1 and reflect them in encumbrance certificates, despite stamp duty not being collected.
The government also intends to empower officials to cancel fraudulent registrations by amending the Registration Act, 1908. The new provision, Section 22-B, would allow the inspector general and the commissioner of registration and stamps to annul transactions obtained through forged documents, impersonation, or double registration.
Currently, only courts have the authority to invalidate such registrations, leaving the state without direct recourse. This proposed change complements the existing Section 22-A, which prohibits registration of certain categories of land, including those owned by the government, waqf, and endowments.
For the amendments to take effect, presidential assent will be required. Some states such as Andhra Pradesh, Tamil Nadu, and Karnataka have already introduced similar provisions. Telangana's earlier attempt to amend the Stamp Act in 2021 was blocked by the Union Finance Ministry, which had recommended revising specific provisions rather than altering the core statute. The latest effort is aligned with those recommendations, allowing the state to move forward without facing central opposition.
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