Stamp Act and Rules

The basic purpose of Indian Stamp Act, 1899 is to raise revenue to Government.
However, over a period of time, the stamped document has obtained so much value that a ‘stamped document’ is considered much more authentic and reliable than an un-stamped document.

Power of Parliament in respect of stamp duty
- Parliament can make law in respect of Stamp Duty. It can prescribe rates of stamp duty. The stamp duty rates prescribed by Parliament in respect of bill of exchange, cheques, transfer of shares etc. will prevail all over India. However, other stamp duty rates prescribed by Parliament in Indian Stamp Act, 1899 (e.g. stamp duty on agreements, affidavit, articles of association of a company, partnership deed, lease deed, mortgage, power of attorney, security bond etc.) are valid only for Union territories. In case of States, the rates prescribed by individual States will prevail in those States.

Powers of State Government of Stamp Duty
- State Government has powers to fix stamp duties on all documents except bill of exchange, cheques etc. Rates prescribed by State Government will prevail in that State. State Government can make law for other aspects of stamp duty also (i.e. matters other than quantum of duty). However, if there is conflict between State law and Union law, the Union law prevails [Article 254 of Constitution].

Instruments chargeable to stamp duty
- Instrument includes every document by which any right or liability, is, or purported to be created, transferred, limited, extended, extinguished or recorded [section 2(17) of Indian Stamp Act]. Any instrument mentioned in Schedule I to Indian Stamp Act is chargeable to duty as prescribed in the schedule [section 3].

The list includes all usual instruments like affidavit, lease, memorandum and articles of company, bill of exchange, bond, mortgage, conveyance, receipt, debenture, share, insurance policy, partnership deed, proxy, shares etc. Thus, if an instrument is not listed in the schedule, no stamp duty is payable. ‘Instrument’ does not include ordinary letters. Similarly, an unsigned draft of an agreement is not an ‘instrument’.


Duty payable when several instruments - In case of sale, mortgage or settlement, if there are several instruments for one transaction, stamp duty is payable only on one instrument. On other instruments, nominal stamp duty of Re. 1 is payable [section 4(1)]. If one instrument relates to several distinct matters, stamp duty payable is aggregate amount of stamp duties payable on separate instruments [section 5]. However, it may happen that one instrument covering only one matter can come under more than one descriptions given in Schedule to Stamp Act. In such case, highest rate specified among the different heads will prevail [section 6].


Powers to reduce stamp duty
- Government can reduce or remit whole or part of duties payable. Such reduction or remission can be in respect of whole or part of territories and also can be for particular class of persons. Government can also compound or consolidate duties in case of issue of shares or debentures by companies [section 9(1)]. ‘Government’ means Central Government in respect of stamp duties on bills of exchange, cheque, receipts etc. and ‘State Government’ in case of stamp duties on other documents [section 9(2)].

Mode of payment of stamp duty
- The payment of stamp duty can be made by adhesive stamps or impressed stamps. Instrument executed in India must be stamped before or at the time of execution (section 17). Instrument executed out of India can be stamped within three months after it is first received in India [section 18(1)]. However, in case of bill of exchange or promissory note made out of India, it should be stamped by first holder in India before he presents for payment or endorses or negotiates in India [section 19].

Valuation for stamp duty
- In some cases, stamp duty is payable on ad valorem basis i.e. on basis of value of property etc. In such cases, value is decided on prescribed basis.

Adjudication as to stamp duty payable
- Adjudication means determining the duty payable. Normally, the person paying the duty himself may decide the stamp duty payable and pay accordingly. However, in cases of complex documents, the person paying the duty may not be sure of the stamp duty payable. In such case, he can apply for opinion of Collector. He has to apply with draft document and prescribed fees. Collector will determine the stamp duty payable as per his judgment [section 31(1)].


What is meant by ‘duly stamped’
- ‘Duly stamped’ means that the instrument bears an adhesive or impressed stamp not less than proper amount and that such stamp has been affixed or used in accordance with law in force in India [section 2(11)]. In case of adhesive stamps, the stamps have to be effectively cancelled so that they cannot be used again. Similarly, impressed stamps have to be written in such a way that it cannot be used for other instrument and stamp appears on face of instrument. If stamp is not so used, the instrument is treated as ‘un-stamped’. Similarly, when stamp duty paid is not adequate, the document is treated as ‘not duly stamped’.

Instrument cannot be accepted as evidence if not duly stamped
- An instrument not ‘duly stamped’ cannot be accepted as evidence by civil court, an arbitrator or any other authority authorised to receive evidence. However, the document can be accepted as evidence in criminal court.

Case when short payment is by mistake
- If non-payment or short payment of stamp duty is by accident, mistake or urgent necessity, the person can himself produce the document to Collector within one year. In such case, Collector may receive the amount and endorse the document that proper duty has been paid [section 41].


Stamp duty on Receipt
- Stamp Duty on receipt is Re. 1 for receipt above Rs. 5,000. Receipt includes any note, memorandum or writing [whether signed by any person or not] (a) where any money, or any bill of exchange or promissory note is acknowledged to have been received or (b) where any other movable property is acknowledged to have been received in satisfaction of a debt or (c) whereby any debt or demand is acknowledged to have been satisfied or discharged or (d) which signifies or indicates any such acknowledgment [section 2(23)].


Stamp duty on transfer of shares in a company or body corporate
- It is 50 Paise for every hundred rupees or part thereof of the value of share. [It is 75 Ps as per Article 62 of Schedule I to Stamp Act, reduced to 50 Ps per Rs 100 vide notification No. SO 198(E) dated 16.3.1976]. As per section 21, the duty has to be calculated on the basis of market price prevalent on date of instrument and not on the face value of shares.


Stamp Duty on transfer in Depository Scheme
- If the company issues securities to one or more depositories, it will have to pay stamp duty on total amount of security issued by it and such securities need not be stamped. [section 8A(a) of Stamp Act]. If an investor opts out of depository scheme, the securities surrendered to Depository will be issued to him in form of a certificate. Such share certificate should be stamped as if a 'duplicate certificate’ has been issued. [section 8A(1)(b) of Indian Stamp Act]. If securities are purchased or sold under depository scheme, no stamp duty is payable.

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GOVERNMENT OF INDIA RULES UNDER THE STAMP ACT
(Finance Department Notification No. C-63-Stamps-25, Dated 5th May, 1925)
RULES UNDER THE INDIAN STAMP Act, 1899

Contents
v
PRELIMINARY
v
IMPRESSED STAMPS
v
ADHESIVE STAMPS
v
MISCELANEOULS
v
NOTES AND ADMINISTRATIVE INSTRUCTIONS ON SECTIONS AND ARTICLES OF SCHEDULES-I AND I-A OF THE STAMP ACT

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What's Latest in Stamp Duty -
The Government of Maharashtra announced the Amnesty Scheme i.e. Stamp Duty under Penalty Reduction Scheme, 2004 w.e.f. 26th January, 2004 upto 25th April, 2004 has been extended till 31-10-2004 ... Click here for the full Scheme and Forms.
Judgement of Bombay High Court, Stamp Duty Ready Reckoner Not Binding ..... click here for the detail
Stamp Duty Rates -
Stamp Duty under Indian Stamp Act more...
Stamp Duty Ready Reckoner (Bombay Stamp Act, 1958 )
Stamp Duty on Instruments - Schedule I of the Bombay Stamp Act
All India Rates of Stamp Duty
Stamp Duty Calculator
Stamp Duty Synopsis -
Introduction
Meaning
Time for Payment
Unsigned Documents
How Property is Transferred
Agreement for Sale
Transfer of flat in CHS
Amalgamation
Power of Attorney
Adjudication
Undervalued Instrument
Co-operative Societies Act
Registration Act
Bombay Stamp Act, 1958
Basic Calculator


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Amnesty Scheme Under The Bombay Stamp Act, 1958.
Subject :
Property Laws
Month-Year :
Sep 2004
Author/s :
Manilal G. SimariaChartered Accountant
Topic :
Amnesty Scheme Under The Bombay Stamp Act, 1958.
Article Details :
Amnesty Scheme Under The Bombay Stamp Act, 1958.
MANILAL G. SIMARIA
(Chartered Accountant)

1. THE SCHEME & PERIOD: -
The right, title and interest in the immovable property is recognized by the state Government through the proper & timely payment of stamp duty and registration of documents pertaining to such specified property. In recent times, the financial institutions, Bankers, lenders insist to pay the stamp duty and registration of such document before availing loan from them. In some cases such institute insist to have chain of all earlier documents properly stamped and registered. Unstamped document is not admitted as evidence in court of law.
Registered society of property owners also insist to pay the stamp duty before transfer of such property in records of society and admission of such purchaser as member. There are two circulars dt. February18, 1994 and July 8, 1996, from the Commissioner of Co-op. Society which has laid emphasis for payment of the stamp duty and registration of such document in certain circumstances.
In recent times, the data collection in respect of Stamp Duty defaulter member from the society of which he is member and also from various other sources is not difficult. Under normal provisions of the Bombay Stamp Act, 1958, the stamp duty defaulter has to pay 2 % interest per month against which the present Amnesty Scheme settles the matter by one time token penalty as specified under the scheme. It is advisable to take the benefit of this welcome amnesty scheme under the Bombay Stamp Act, 1958 in respect of your all prior documents of property on which proper stamp duty is not paid.
To regularize all such documents, this fourth Amnesty Scheme introduced on 24.01.2004 and amended on 17.05.2004 under the Bombay Stamp Act, 1958, named as Abhay Yojna – 2004, is in force from January 26, 2004 to October, 31, 2004. (hereinafter referred to as ‘The Scheme’)
The Government of Maharashtra on representations being made by various organizations, has in public interest amended the Stamp Duty Amnesty Scheme vide order dated 17.05.2004 on various aspect which is a welcome step. The amendments made in the Scheme are broadly enumerated as under: -

Widened the Scope of the Scheme covering more documents under Part I & Part II of the Scheme.
To prove the ‘Date of Execution’ of document for applicants of Part I – New cases, various alternatives have been incorporated which is appreciable move.
c. By removing certain ambiguities and practical difficulties under the original Scheme and through certain clarifications on some matters the Scheme has been made easy and more workable to some extent.
In fact, after the amendment in Scheme on 17.05.2004, now the response to the Scheme is good, which proves the increased confidence of applicants in the Amnesty Scheme under the Bombay Stamp Act, 1958.
The Scheme has been extended up to October 31, 2004 as per Government notification dtd. July 31, 2004.

SCOPE OF THE SCHEME
The Concession under the Scheme in respect of penalty chargeable for default in payment of stamp duty is available covering two types of cases: -
(I) New cases – Part I of the Scheme covers all types of documents of schedule I of Bombay Stamp Act. 1958. The documents covered under the scheme are New cases opting the benefit of Scheme first time in respect of particular document and documents which are also not covered under part II of the Scheme. The New cases are pertaining to the original documents executed prior to commencement of the Scheme on which no action is initiated under the Bombay Stamp Act, 1958 and / or under previous Amnesty Schemes.
(II) Old Cases- Part II of the Scheme covers following types of documents as specified under note A, B & C under part II of the Scheme.
Note A – Such cases where the Deficit Stamp Duty has been decided in Appeal or under the previous Amnesty Scheme or under any provisions of the Bombay Stamp Act, 1958 but it unpaid for the reasons of heavy penalty.
Note B – The Scheme shall apply to the cases where deficit portion is pointed out in the Inspection Report of Accountant General or any other Audit conducted by the Department and shall also be applicable to cases decided under Sections 31, 32A, 32B, 33, 40 and 53 of Bombay Stamp Act, 1958 and cases pending in previous Amnesty Scheme.
Note C – This PART shall apply to the documents in respect of which action has been initiated or completed by the Collector of Stamps by impounding them or under the evasion of Stamp duty or under section 32A or under any Amnesty Scheme or the matter is pending before any Appellate authority , or Court including High Court or Supreme Court or recovery under Revenue Recovery Certificate has already commenced.
For part II – old cases of the Scheme no new proceeding will be initiated as stamp duty is already decided earlier. The benefit under the Scheme for applicant under Part I & Part II will be available only in respect of any documents executed prior to January 26, 2004. It is to be noted that the Amnesty Scheme is in respect of reduction of penalty only. Broadly, the old cases on which some action for payment of stamp duty and penalty thereon is initiated, pending cases for payment under earlier amnesty Scheme, documents impounded by the department, Audit objection cases, pending appeal cases, etc. cases on which stamp duty & penalty is payable are covered under the scheme.

DOCUMENTS EXECUTED ON PLAIN PAPER: -
Condition 12 of part of original order Dated 24.01.2004 is reproduced as under: -
“12 Unstamped instruments executed on plain papers shall not be entitled for any benefit under the scheme “ However, by amending the Scheme as per order Dated 17.05.2004 this condition no. 12 is deleted by making amendment in clause 10 (F) which is reproduced as under: -
“10 (F) condition 12, shall be deleted”

SIGNATURE ON APPLICATION: -
The scheme state that only the person concerned with the documents or his attorney along with executed power of attorney attached with application (which is mandatory) shall be entitled to make the application in prescribed form in respect of New & Old cases.

BENEFIT UNDER THE SCHEME: -
Under the Scheme, no benefit is granted in respect of Stamp Duty. The Scheme grants concession by way of reduction in respect of penalty payable for Late / Default in payment of Stamp duty (The said penalty is at 24% P. A. or maximum twice of stamp duty under normal provision of Bombay Stamp Act, 1958). Under the Scheme reduced penalty chargeable is as under: -
Sr.
Deficit in stamp duty
Penalty chargeableunder the Scheme
I
Where such deficit is Less than Rs. 1,000
Equivalent to the amount of deficit
II
Where such deficit is From Rs. 1,000 to Rs. 1,00,000
Rs. 1,000
III
Where deficit amount Exceeds Rs. 1,00,000
1% of deficit amount
FACE VALUE UNDER PART - I OF THE SCHEME: -

The Applicant to Part I alongwith application have to pay the stamp duty on the “Face Value” shown on the documents. The face value as stated in the Part I of the Scheme has following meaning.
In case of conveyance – The value as disclosed prima facie in document.
In case of partition etc – an amount of consideration between the parties.
In case of Gift – The amount gifted as mentioned in documents.
In other cases – The amount as may be directed by concerned officer.
However, finally the stamp duty is payable on higher of ‘Face Value’ or ‘Market Value’ by applicant of Part – I (New cases).
For applicants under Part II of the scheme the deficit stamp duty is to be paid as per the previously decided deficit stamp duty. However, in both the cases it is better to get the stamp duty amount checked at Government Counter.

MARKET VALUE: -
Ultimately the Stamp duty is payable on market value or agreement value whichever is higher. The Agreement value is the value shown in agreement. The concept of market value depends on multiple significant factors as enumerated in that particular years Stamp Duty Ready Reckoner. The relevant documentary proof which effects the valuation has to be attached with application under Part I of the Scheme, which will also help for calculation of proper valuation and determination of proper duty.
For applicant of Part – II, the valuation is irrelevant as the Stamp Duty is already decided earlier.

8. PROOF OF EXECUTION OF DOCUMENT:
The Scope of the documents specified under amended scheme Dated 17/5/2004 has been widened in respect of proof of execution of document under Part I (New Cases) of the Scheme.
To prove the “Date of Execution” the applicant will have to submit at least one of the following documents namely: The condition no 10 of order dt. 17.05.2004, which deals with the above has been reproduced as under :-
“10. The applicant shall submit all the relevant papers affecting chargeability of instrument along with the application. In addition, to prove the date of execution, the applicant will have to submit at least one of the following documents, namely: -
(a) an extract of bank passbook of one of the concerned parties to the documents; or
(b) Bank Certificate; or
(c) Bank Statement; or
(d) A certificate under Section 230 –A or Section 269 UL of Income Tax Act, 1961, or
(e) The balance sheet certified by the Chartered Accountant accompanying with the income tax return. ”

9. VARIOUS TIME LIMITS UNDER THE SCHEME
I. Scheme is available from 26.01.2004 to 31.10.2004 (Both the days inclusive)
II. Deficit Stamp duty and penalty decided under the scheme both are to be paid within 30 days from receipt of Notice, otherwise it will deemed that the applicant does not wish to be the beneficiary of the Scheme. (Applicable to Part I - new cases of the Scheme)
III. Different rates of stamp duty and different market value in different years & date are to be checked from respective year Stamp Duty Ready Reckoner by applicant of (Part I ) new case of the Scheme.
IV. On payment of duty & penalty by applicant of part II of the scheme the department will issue certificate to that effect within 10 days of payment and on clearance of demand draft. Ensure that the proper payment of stamp duty & penalty is made as no refund in granted to the applicant of Part II (Old cases) of the scheme.

10. REMEDY TO APPLICANT AGAINST THE ORDER OF OFFICER, DETERMINING UNACCEPTABLE VALUE UNDER PART - I.
If the market value determined by the concerned officer is not found acceptable, on payment of necessary fees the applicant will be entitled to get the detailed order with technical report against which he can appeal. In case the decision of appeal is found favorable, he will entitled for refund but without interest.
11. PARTICULARS TO BE SUBMITTED WITH THE APPLICATION: -
11A: - Particulars applicable to New Cases (Part I) Only

I. Original Agreement & photocopy of the same.
II. Proof of execution of document.
III. Submission of all relevant papers / documents effecting market value & chargeability of instrument.
IV. For rental property certain specified details & proof thereof as mentioned in Stamp Duty Ready Reckoner.
V. Submission of prescribed affidavit consisting property details and Stamp Duty payment made earlier and paid now etc details in given format.

11 B: - Particulars applicable to Old Cases (Part II) Only.
I. Details of original documents lying with the stamp duty departments.
II. Certified copy of demand Notice specifying the previously decided stamp duty & accordingly payment along with penalty as specified under the Scheme.
III. Affidavit to that effect for unconditionally withdrawn of appeal, in prescribed format under the Scheme.
IV. Proper payment of deficit stamp duty & penalty.

11 C: - Particulars applicable both New & Old Cases (Part I & Part Ii)

I. Duly signed application as prescribed in different standard form for each Part with annexure.
II. Two self addressed envelopes – 9 x 4 inches size affixation of with Rs. 25/- postal stamp on
each of such envelope.
III. Payment of deficit duty by challans / pay slip / demand draft.
IV. Details of payment of Stamp duty in given format
V. Attach Power of Attorney if the applicant is attorney
VI. Mention details about enclosures & obtain a receipt of submission of application.

11 D : - The particular stated above for submissions under 11 A, 11 B & 11 C are all illustrative and not exhaustive. Therefore, the all applicant have to check up the above all submissions with the prescribed check list of Stamp Duty Department and also get it rechecked at the department counter before submission.
The above are some highlights & a broad view on some significant aspects of the Scheme. However, the reader & applicant has to observe and cross check the above information with Government notification / Order Dated 24.01.2004, 17.05.2004, 31.07.2004 and further pronouncement or amendments if any which may be made in due course of time.


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Property Law
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CHECK LIST FOR THE PURCHASE OF A FLAT IN INDIA

THE REGISTRATION ACT, 1908
ADDRESSES OF IMPORTANT GOVERNMENT OFFICES

STAMP DUTY READY RECKONER
STAMP DUTY READY RECKONER
w.e.f. 1-9-1995
Ready Reckoner of Stamp Duty payable under Article 25(d) of Schedule 1 of the Bombay Stamp Act 1958 relating to residential premises in Mumbai in a Co-operative housing society registered or deemed to have been registered under the Maharashtra Co-operative Society Act 1960 or to which Provisions of the Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer Act, 1963, or the provisions of the Maharashtra Apartment Ownership Act 1970, apply.
Value in Rs.
Stamp duty payable Rs.
(i)
Upto Rs. 1,00,000/-
NIL
(ii)
Between Rs. 1,00,000 and Rs. 2,50,000
0.5 per cent of the value.
1,10,000
Rs. 550
1,20,000
Rs. 600
1,25,000
Rs. 625
1,50,000
Rs. 750
1,75,000
Rs. 875
2,00,000
Rs. 1,000
2,25,000
Rs. 1,125
2.50,000
Rs. 1,250
(iii)
Between Rs. 2,50,001 and Rs. 5,00,000
Rs. 1,250 + 3% of value above Rs. 2,50,000.
2,60,000
Rs. 1,550
2,70,000
Rs. 1,850
2,75,000
Rs. 2,000
3,00,000
Rs. 2,750
3,25,000
Rs. 3,500
3.50,000
Rs. 4,250
3,75,000
Rs. 5,000
4,00,000
Rs. 5,750
4,25,000
Rs. 6,500
4,50,000
Rs. 7,250
4,75,000
Rs. 8,000
5,00,000
Rs. 8,750
(iv)
Between Rs. 5,00,001 and Rs. 10,00,000
Rs. 8.750 + 6% of value above Re. 5,00,000.
5,10,000
Rs. 9,350
5,20,000
Rs. 9,950
5,25,000
Rs. 10,250
5,50,000
Rs. 11,750
5,75,000
Rs. 13,250
6.00,000
Rs. 14,750
6,25,000
Rs. 16,250
6,50,000
Rs. 17,750
6,75,000
Rs. 19,250
7,00,000
Rs. 20,750
7,25,000
Rs. 22,250
7,50,000
Rs. 23,750
7,60,000
Rs. 24,350
Value of property Rs.
Stamp duty payable Rs.
7,70,000
Rs. 24,950
7,75,000
Rs. 25,250
8,00,000
Rs. 26,750
8,25,000
Rs. 28,250
8,50,000
Rs. 29,750
8,75,000
Rs. 31,250
9,00,000
Rs. 32,750
9.25,000
Rs. 34,250
9,50,000
Rs. 35,750
9,7b,OOO
Rs. 37,250
10.00,000
Rs. 38,750
(iv) Above Rs. 1 0,00,001 Rs. 38,750 + 8% of value above Rs. 10,00,000.


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The actual registration is done in MHADA Office ground floor
Office No. 13