Mysore/Mysuru: Cases are emerging where sites allotted by Mysuru Urban Development Authority (MUDA) are being sold to others through Settlement Deeds, thereby evading the Stamp Duty owed to the State Government.

In one instance, N. Manjunath transferred full ownership of a MUDA site (number 11809/A) to S. Shivanna by registering a settlement deed at the Mysuru South Sub-Registrar’s Office on May 28, 2024. This transfer occurred just 10 days after Manjunath received the Title Deed from MUDA for the same site under an incentive scheme on May 18, 2024.

What does the rule say?

According to the rules, a Sale Deed must be registered to sell any property. The Sale Deed should specify that the buyer has paid the property’s value to the seller. The required registration fee, service charges, memo charges and Stamp Duty must be paid to the Government as part of this process.

According to experts, a Settlement Deed is primarily used for dividing property among family members — such as children, siblings or relatives — or for transferring shares, money or property interests between partners in a partnership firm based on mutual agreements.

In contrast, a Sale Deed is required when individuals sell their property to another person. Therefore, experts assert that a ‘Settlement Deed’ should not be used for selling property to a third party; this transaction should be conducted through a Sale Deed instead.

Many individuals are using Settlement Deeds to evade paying Stamp Duty to the Government by transferring sites through these deeds. There has been a rise in cases where MUDA officials are registering Khatas and revenue to the names of individuals who have acquired land through Settlement Deeds.

This practice is leading to substantial financial losses for the State Exchequer, according to experts familiar with land transaction agreements.