Stamp Duty on Facility Agreement in Delhi: An Overview

Stamp duty is a tax imposed by the government on documents that are executed for various purposes such as property transactions, loan agreements, and other such contracts. It is the responsibility of the parties involved to pay the stamp duty on the relevant documents.

When it comes to facility agreements in Delhi, stamp duty is a crucial consideration for both the borrower and the lender. In this article, we’ll take a closer look at stamp duty on facility agreements in Delhi and what you need to know as a borrower or lender.

What is a Facility Agreement?

A facility agreement is a legal document that defines the terms and conditions of a loan provided by a lender to a borrower. It outlines the amount of the loan, interest rate, repayment terms, and other such details.

Facility agreements are commonly used in business financing, real estate transactions, and other similar situations. The agreement sets out the terms and conditions of the loan and is legally binding on both the borrower and the lender.

Stamp Duty on Facility Agreement in Delhi

In Delhi, stamp duty on facility agreements is governed by the Indian Stamp Act, 1899. The stamp duty is payable on the loan agreement or facility agreement, which is a document executed between the borrower and the lender.

The stamp duty payable on facility agreements in Delhi is calculated as a percentage of the loan amount. The stamp duty rates in Delhi vary depending on the loan amount and the type of document executed.

For example, if the loan amount is less than Rs. 5 lakhs, the stamp duty on the facility agreement is 0.2% of the loan amount. If the loan amount is between Rs. 5 lakhs and Rs. 10 lakhs, the stamp duty is 0.5% of the loan amount. If the loan amount is above Rs. 10 lakhs, the stamp duty is 1% of the loan amount.

The borrower and the lender are jointly and severally liable to pay the stamp duty on the facility agreement. Typically, the stamp duty is paid by the borrower, unless otherwise agreed between the parties.

Consequences of Not Paying Stamp Duty on Facility Agreement

Failure to pay the stamp duty on the facility agreement can have serious consequences. The document becomes invalid, and the parties cannot rely on it in a court of law. In addition, the parties may be subject to penalties and fines for non-payment of stamp duty.

In conclusion, stamp duty on facility agreements is an important consideration for both the borrower and the lender in Delhi. It is important to understand the stamp duty rates and to ensure timely payment to avoid any legal consequences. As a professional, I hope this article has provided you with a better understanding of stamp duty on facility agreements in Delhi.