Tamil Nadu Town Panchayats, Third Grade Municipalities, Municipalities and Municipal Corporations (Duty on Transfers of Property) Rules, 2011
The Governor of Tamil Nadu, through the Municipal Administration and Water Supply Department under G.O. Ms. No. 62, Municipal Administration and Water Supply (Election), dated 28th February 2011, made rules for collecting, accounting for and distributing transfer duty on specified immovable property transactions in municipal areas across Tamil Nadu. The rules took effect on 28th February 2011, and the Gazette also records the rescission of the separate 1988 transfer duty rules for the Madurai and Coimbatore City Municipal Corporations under G.O. Ms. No. 63, Municipal Administration and Water Supply (Election), dated 28th February 2011.
What the rules govern
The Tamil Nadu Town Panchayats, Third Grade Municipalities, Municipalities and Municipal Corporations (Duty on Transfers of Property) Rules, 2011 apply to every Town Panchayat, Third Grade Municipality, Municipality and Municipal Corporation in Tamil Nadu. They were made under the Tamil Nadu Duty on Transfers of Property (in Municipal Areas) Act, 2009 and came into force on 28th February 2011.
Transfer duty applies under the Act to instruments involving:
- Sale of immovable property.
- Exchange of immovable property.
- Gift of immovable property.
- Mortgage with possession.
- Lease in perpetuity.
The provisions of the Indian Stamp Act, 1899 and its rules apply, as far as relevant, to transfer duty. A transfer duty amount or portion below one rupee is not collected.
What property parties and registration officers must do
An instrument presented for registration must separately state the required property particulars. It must also clearly identify the municipality within whose jurisdiction the property is situated.
If these particulars are missing, the registering officer must keep the instrument pending rather than immediately impound it. The particulars may be supplied later. If the instrument is then found to be insufficiently stamped, it may be impounded and forwarded to the District Collector.
For an exchange, the duty calculation follows these principles:
- If the exchanged properties have unequal values, duty is levied on the higher value.
- If their values are equal, the higher amount of duty that applies is levied.
Accounting and distribution
Registering officers must separately account for stamp duty and transfer duty, with separate accounts for each municipality. District Collectors must also account for relevant instruments that are not compulsorily registrable but come before them under the Stamp Act.
The distribution process provides that:
- Three per cent of transfer duty paid is deducted for collection charges, together with any applicable refunds.
- After those deductions, fifty per cent is payable to the municipality concerned.
- The remaining fifty per cent is payable to the Tamil Nadu Urban Road Infrastructure Fund.
- Net amounts are rounded to the nearest rupee.
Government budget allocations are based on the actual transfer duty collected in the preceding financial year. Municipal payments and credits to the Fund are processed quarterly.
Earlier city rules rescinded
The Municipal Administration and Water Supply Department notification under G.O. Ms. No. 63, dated 28th February 2011, rescinded the Madurai City Municipal Corporation (Duty on Transfer of Property Rules), 1988 and the Coimbatore City Municipal Corporation (Duty on Transfer of Property Rules), 1988.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Does this apply to property in every Tamil Nadu municipality?
Yes. The rules apply to all Town Panchayats, Third Grade Municipalities, Municipalities and Municipal Corporations in Tamil Nadu.
What happens if my property document does not identify the municipality?
The registering officer must keep the instrument pending so the missing particulars can be supplied. If it is then found to be insufficiently stamped, it may be impounded and forwarded to the District Collector.
How is transfer duty handled when two properties are exchanged?
If the properties have different values, duty is levied on the higher value. If their values are equal, the higher applicable amount of duty is levied.
Where does the transfer duty collected from a property transaction go?
After deducting three per cent for collection charges and any applicable refunds, fifty per cent is payable to the municipality concerned and fifty per cent to the Tamil Nadu Urban Road Infrastructure Fund.
