STAMP_ACT

The Bombay Stamp

Act, 1958

Lecture & Presentation

By

P. R. Kulkarni,

Managing Director,

Types of Documents

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Specified Documents

– Covered under the

Indian Stamp Act, 1899 (Central Act) -

listed in

Entry 91 of List-1 of Schedule VII of the Indian constitution

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Documents other than specified

–

Covered under respective State Acts. In

Maharashtra, the Bombay Stamp Act, 1958

(State Act)

– Listed in Entry 91 of List-II of Schedule VII of

Specified Documents

covered by

Indian Stamp Act

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Bills of Exchange

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Promissory Notes

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Bills of lading

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Letter of Credit

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Insurance Policies

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Share Transfers

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Proxies

General points about

Stamp Act

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Stamp duty is a kind of Tax like Sales Tax or

Income Tax.

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Needs to be paid in full and in time.

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Delay in payment or short payment attracts

penalty – 2 % per month on deficit –

Maximum 200%

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Duly stamped document is admitted as

General points about

Stamp Act

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If the document is unstamped or

under-stamped Court may impound the document

for penalty and has discretion not to get

admitted as evidence.

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Payment should be before execution of

document or at the time of execution.

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Any party to the document can pay stamp

General points about

Stamp Act

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Stamp paper must be purchased in the name

of any of the party to the document, w. e. f.

01.05.1994.

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Stamp in the name of Advocate / CA /

consultant etc. not allowed.

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Stamp must be used within six months from

date of purchase w. e. f. 01.05.1994. After six

months it is mere piece of paper.

General points about

Stamp Act

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Stamp duty should be paid on consideration

value or market value whichever is high for

transfer of property.

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If the property is sold by Govt. or Semi-Govt.

bodies or local authorities e.g. MHADA,

CIDCO, BPT, MC, MIDC etc, or Income Tax

Dept. then value declared by these

departments in notice is treated as final

market value.

General points about

Stamp Act

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Only authorized vendors can sale the

stamps.

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For charging stamp duty, the instrument is

not to be treated by the name it bears but

by the substance or real nature of the

General points about

Stamp Act

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The stamp duty is imposed upon the

instrument and not upon the transaction.

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The instruments or the documents have to

be read as they are i. e. as they are worded

or drafted.

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Nothing is legal that adopts a method in

effecting a transaction so as to reduce or

lesson the liability of stamp duty.

General points about

Stamp Act

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The Act is a fiscal measure enacted to

secure revenue for the State from certain

classes of instruments.

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A document which is not stamped, though

required to be stamped or is an

under-stamped, is not by that reason, invalid as

between the parties. (C. C. R. A. Vs.

General points about

Stamp Act

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Stamp Act is fiscal measure enacted

to secure revenue for the state on

certain cases of instruments. It is not

equipped to arm litigant with a weapon

of technicalities. (Hindustan Steel Ltd.

Vs. M/s Dilip Construction Co., AIR

General points about

Stamp Act

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The Act being a fiscal statute it is to be

interpreted strictly and in a manner in favor

of the subject. (Fernandez Vs. State of

Kerala, AIR 1957 SC 657)

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The Stamp Act has to be construed strictly

as it is a taxing statute. (Hindustan Lever

Ltd. Vs. Municipal Corporation 1995-3

SCC, 716)

General points about

Stamp Act

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The object of the Stamp Act is to collect

proper stamp duty on an instrument or

conveyance on which such duty is payable.

The imposition of stamp duty on sale deeds

is on the actual market value of such

property and not the value described in the

instrument.

An obligation is cast on the

authority to properly ascertain true market

value of the property and for that purpose the

authority is not bound by the apparent tenor

of the instrument.

Stamp duty for

Acknowledgement – Article 1

Acknowledgement by a debtor

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Exceeds Rs. 5,000/- but below Rs.

10,000/-………

Rs.

1/-z

For every Rs. 10,000/- or part thereof above

Rs. 10,000

…………

Rs. 1/- subject to

maximum of Rs.

100/-Stamp duty for

Affidavit – Article 4

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For affidavit the stamp duty is Rs.

100/-Stamp duty for

Agreement – Article 5

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If relating to giving authority or power to a

promoter or a developer for construction on,

development of or sale or transfer of any

immoveable property

……… same duty as for conveyance

under clause (b), (c), or (d), as the case may

be, of Article 25 on market value of property

Stamp duty for

Agreement – Article 5

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If relating to purchase of unit in any scheme or

project by a person from a developer

……… same duty as for conveyance

under clause (b), (c), or (d), as the case may be, of

Article 25 on market value of property

Provided that at the time of conveyance this duty

paid will be adjusted if conveyance is made within

one year. If no duty is payable

……… Rs.

Stamp duty for

Agreement relating to Deposit of Title

Deed – Article 6(1)

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Where such deposit has been made by way

of security for the requirement of many

advanced or to be advanced by way loan or

an existing or future debt

…….. Rs. 1/- for every Rs. 10,000/- or

part thereof for the amount secured by such

deed subject to minimum of Rs. 100/- and

maximum Rs.

5,00,000/-Stamp duty for

Agreement relating to Pledge and

Hypothecation – Article 6(2)

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Where the pledge or hypothecation of

movable property is to secure the repayment

of money advanced or to be advanced by

way of loan or an existing or future debt

…… Rs. 1/- for every Rs. 1,000/- or part

thereof for the amount secured subject to

minimum of Rs. 100/- and maximum Rs.

5,00,000/-Stamp duty for

Bond – Article 13

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Not being a debenture or otherwise provided

by the Bombay Stamp Act or Bombay court

Fees Act, 1959

…… for every Rs. 500/- or part thereof

Rs. 5/- (i. e. 1% of value), subject to minimum

of Rs.

100/-Stamp duty for

Conveyance – Article 25 (C)(vi)(b)

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If instrument transferring the property is

non-residential within the Municipal Corporation

of cities of Pune, including the Cantonments

of Pune and Kirkee

……. For every Rs. 500/- or part thereof

Stamp duty for

Conveyance – Article 25 (C)(d)(i)

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If instrument transferring the property is

residential and the value of property is

i.

Up to Rs. 2,50,000/-

……… duty Rs.

100/-ii.

Up to Rs. 5,00,000/-

……… duty Rs.

100/-+ 3% of value above Rs.

2,50,000/-iii.

Above Rs. 5,00,000/-

……. duty is Rs.

5,00,000/-Stamp duty for

Further Mortgage Charge – Article 33(b)(ii)

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Instrument imposing a further charge on

mortgaged property, when the first mortgage

is without possession and further charge is

also without possession

……. Rs. 5/- for every Rs. 1,000/- or part

thereof for the amount secured by further

charge, subject to minimum of Rs. 100/- and

maximmun of Rs.

10,00,000/-Stamp duty for

Mortgage Deed – Article 40 (b)

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When possession is not given or agreed to

be given

…… for every Rs. 500/- or part thereof

Rs. 5/- (i. e. 5% of amount secured) subject

to minimum of Rs. 100/- and maximum of Rs.

10,00,000/-Thanks

Lecture & Presentation

By

P. R. Kulkarni

Managing Director