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Stamp Duty Refund Process For Cancelled Sales Deed

Oct 27, 2023
stamp duty refund process

For any real estate transaction, a sale deed and stamp duty go hand in hand. A sales deed is a legal agreement proving the property transfer from the seller to the buyer. This document gives the buyer complete lawful ownership of the property.

If the sales deed is a train ticket, stamp duty is the tax you pay while purchasing that ticket. Stamp duty is a tax levied by state governments on the property transferred from the seller to the buyer. It costs between 5 and 8% of the total purchase price. In this article, let us delve deeper into the rules and regulations surrounding the refund of stamp duty.

What is The Eligibility Criteria For A Refund On Stamp Duty?

A person can claim stamp duty on specific grounds, like excess payment, double deduction on the same document, or an error in the transaction process. If the wrong type of paper is used (either judicial or non-judicial), there might be a chance to get a refund.

Damaged or unused stamp papers can be reimbursed with appropriate notification to the authorities. If a property transaction does not go well with the builder/seller and the buyer, it is possible to request a refund for the same using the cancelled sales deed.

What Is A Cancelled Sales Deed?

A cancelled sales deed is a legal agreement created when a sales deed cannot follow through. As a result, the property’s ownership will return to its previous state. Any rights and responsibilities associated with the sale deed will be invalid.

Certain situations may warrant the cancellation of the sales deed, such as:

  • Rejection of home loan application by the lending institution.
  • History of criminal record or conviction.
  • Bankruptcy of buyer or seller is in progress.
  • The seller doesn’t legally own the property or have the authority to sell it.
  • One or both parties are influenced by false information, manipulation, or pressure, resulting in backing out of the agreement.
  • The buyer cannot deliver the property to the government by the due date.

What Is The Best Time To Claim Stamp Duty Refund?

The best time to apply for a refund on stamp duty is as soon as the cancellation deed is in force. It is refunded with a 10% deduction from the original stamp amount paid.

You can cancel a registered sales deed within 5 years of the agreement registration date. After cancellation, you may apply for a refund within 6 months of the registration of the cancelled sales deed.

If you have paid stamp duty for an unregistered property, you must apply for reimbursement within six months from the payment date. In such cases, you can claim both registration fees and stamp duty. However, please note that there won't be any refund of registration fees for registered sales deeds.

What Are The Documents Required For Stamp Duty Refund?

Having the original and copies of the requisite paperwork is essential. The list of documents needed may vary slightly in different states. You can use the list of documents below as a general guide:

  • Original copy of sale agreement.
  • Original or certified copy of cancellation deed.
  • No Objection Certificate (if applicable).
  • Affidavit
  • Power of attorney (if applicable)
  • Null cheque
  • Copies of Aadhar and PAN card
  • Copy of challan (this may vary from state to state)
  • Proof of stamp purchase.

Step by Step Guide To Stamp Duty Refund Process

Many state governments have streamlined the refund process by making them available online on their respective websites. However, it is mandatory to deposit some documents at the collector’s office.

Here are the crucial steps to follow:

  • Collect all relevant documents as listed above.
  • Fill out the application form (online or offline) immediately after the sale deed is declared void. Take care not to make any errors.
  • Submit the application form with copies of the necessary documents.
  • After submission, the Sub-Registrar or other concerned revenue officials review the application to verify its authenticity.
  • The verified application is then forwarded to the Collector/Deputy Collector, who approves and processes the claim.

Being a bureaucratic process, receiving the refund on your stamp duty can take anywhere from 15 days to a few months. It is helpful to be patient in such instances.

Tips To Remember For Stamp Duty Refund Process

As with any documentation process, it would be helpful to keep the following things in mind:

  • Double-check all your documents before signing anything.
  • Apply as early as possible to avoid missing out on the refund.
  • Remember to follow up frequently with the authorities to keep track of your refund status.
  • Be familiar with the rules and regulations about stamp duty in your state to ensure a smooth application process.
  • You can seek counsel from a qualified lawyer as a precautionary measure. This will ensure everything is okay and there won’t be any hindrances in the refund process.


Understanding stamp duty and different deeds is essential to ensuring smooth property transactions. A cancelled sales deed may dampen your dream of buying a home, but it is equally important to save your hard earned money. With prompt action, you can claim your refunds without any complications.

SMFG Grihashakti houses a team of experts to help you with a simple and efficient home loan process and flexible repayment schedules. Check your eligibility, calculate your EMI to plan your finances well in advance, and apply now!


What Is The Meaning Of A Refund Of Stamp Duty?

If a property deal doesn’t work out or some conditions are unmet, it can lead to cancellation of the sale deed. In such cases, the person is eligible for a refund on stamp duty.

How Do I Get A Refund On Registration Fees?

To get a refund on registration fees, you must submit an application form, copies of the stamp duty receipt, cancelled sales deed, and a written record of the reason for cancellation.

What Is The Limitation Of Stamp Duty Refund?

You can apply for a refund 6 months from the registration date for unregistered sales deeds. On the other hand, you can apply for registered properties anywhere from 6 months to 2 years from the date of registration of the sales deed. These rules vary from state to state, and it is best to take note of the regulations in your area.

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

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