Telangana Government Plans Major Amendments to Stamp and Registration Acts to Protect Revenue

The Telangana government is planning key amendments to the Indian Stamp Act and the Registration Act to address revenue losses and fraudulent property registrations. The proposed changes aim to ensure that buyers of auctioned properties, particularly those sold by banks and financial institutions, pay the required stamp duty on the transaction value.

Currently, buyers often avoid stamp duty by submitting a ‘sale certificate’ provided by banks. Sub-registrars then record the property in Book 1, which is reflected in the encumbrance certificate, even if the applicable duty has not been paid. This practice has resulted in significant annual revenue losses for the state government and has occasionally led to legal disputes when sub-registrars refuse to accept sale certificates.

A senior official from the registrations department explained, “The Hyderabad Metropolitan Development Authority (HMDA) has been auctioning land for over two decades. Properties are registered in the names of successful bidders only after paying the 7.6% stamp duty and registration charges. The problem arises with banks and financial institutions, where duty is often bypassed.”

To address this, the government is proposing amendments that would empower the inspector general and commissioner of the registration and stamps department to cancel fraudulent registrations. This would cover cases of double registration, forged documents, and impersonation. Currently, once a property is registered with a sub-registrar, only courts have the authority to declare the transaction null and void. The proposed changes would allow officers to act on complaints or initiate suo motu action to cancel such registrations.

An earlier attempt to amend the Stamp Act in 2021 was rejected by the Centre, which recommended adjustments to specific provisions rather than a full overhaul of the Act. Building on that advice, the Telangana government is now focusing on targeted amendments to prevent abuse and protect revenue interests.

Another key proposal involves adding a new section, 22-B, to the Registration Act, complementing the existing Section 22-A, which prohibits registration of government, waqf, and endowment land. Section 22-B would empower registration officers to cancel registrations for properties obtained through fraudulent means. States such as Andhra Pradesh, Tamil Nadu, and Karnataka have already implemented similar provisions, providing a precedent for Telangana.

Officials noted that these amendments will improve accountability in property transactions, reduce opportunities for fraud, and strengthen compliance with the law. By streamlining registration processes and enforcing duty payments, the government expects to curb longstanding revenue losses while providing clarity for legitimate buyers.

The amendments are expected to be presented to the Telangana cabinet in the near future, after which they will require presidential assent. Once implemented, buyers of auctioned properties and banks will have to follow stricter guidelines, ensuring that all transactions are legally compliant and recorded transparently.

In addition to revenue protection, the changes aim to enhance public trust in the property registration system. By giving officers the authority to act against sham deals, the government hopes to discourage fraudulent practices and simplify dispute resolution. This approach is also expected to reduce litigation, as officers can intervene directly without requiring court action for cancellation.