Stamp laws In India: An Overview With Recent Amendments

Advocates Kirit Hakani & Niyati Mankad (Hakani) have exhaustively discussed the Stamp Law prevailing in the State of Maharashtra.The constitutional scheme and important legal provisions of stamp laws have been explained. The ld. authors have also dealt with the amendments brought in the Central Law by the Finance Acts 2019 & 2020 which have brought a new regime for levying stamp duty on securities and cleared confusions and disputes prevailing for many years. The relaxations given by the State Government on account of the COVID-19 pandemic have also been discussed. The law relating to stamp duty on gifts to relatives, as prevailing in Gujarat, Tamil Nadu and Karnataka, have also been explained

I. Introduction: Object & Purpose.

1.       Laws dealing with Stamp Duty are purely fiscal measures enacted to secure revenue for the Government on certain class of instruments. It is designed to secure revenue for the State on certain classes of instruments and all its provisions must be construed as having in view the protection of revenue and the prevention of evasion of the revenue that it imposes.

2.       This object is attained inter alia by excluding documents/ instruments which are not stamped or insufficiently stamped, as evidence. However, the purpose of the Act is not to exclude evidence or to enable parties to avoid their obligations on technical grounds or to alter the terms of the bargain between the parties. Thus, theyare not enacted to arm a litigant with a weapon of technicality to meet the case of his opponent. (1) The stringent provisions of the Act are concerned solely in the interest of the revenue, and once that object is secured according to law, the party staking his claim on the instrument will not be defeated on the ground of the initial defect in the instrument. (2)

3.       Every state has its own law dealing with Stamp Duty. Most of these state laws are pari-materia. Also, in India there is Central Law dealing with Stamp duty. In this Article I have discussed the Central law and State Law prevailing in the State of Maharashtra. Further, the Article also deals with the Amendments brought in the Central Law by Finance Act, 2019 & 2020 which have brought a new regime for levying stamp duty on securities and cleared confusions and disputes prevailing for many years. The Maharashtra Government has given certain relaxations on account of the current COVID-19 pandemic. The said relaxations are also discussed herewith. As far as the instrument of Gift is concerned, provisions prevailing in Gujarat, Tamil Nadu and Karnataka are covered.

II.        Legislative Competence of Union& State Legislature under the Constitution of India to enact stamp laws:

• The Constitution of India empowers both the Parliament and the State Legislature to make provisions and laws for stamp duty within its ambit. The Indian Stamp Act, 1899 is the Central Legislation while the States have their own local stamp acts to deal with issues arising within that particular State. The Bombay Stamp Act, 1958 now known as the Maharashtra Stamp Act, 1958 (“MSA”) which came into force on 16th February, 1959 is the law for stamp duty within the State of Maharashtra.
• To understand the legislative competence of the centre & state to legislate on stamp duty one must refer to the Seventh Schedule to the Constitution of India:
• Entry 91 of List I (Union List) of the Constitution of India mentions “rate of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts”.
• Entry 63 of List II (State List) mentions, "rate of stamp duty in respect of documents other than these specified in the provisions of List I with regard to rates of stamp duty."
• Entry 44 of List III (Concurrent List) mentions, "stamp duties other than duties or fees collected by means of judicial stamps, but not Including rates of stamp duty."
• Accordingly, ISA covers certain documents as specified in Entry 91 of List I in the Seventh Schedule to the Constitution of India. Whereas the MSA is enacted with the object to consolidate and amend the law relating to stamps and rates of stamp duties other than those in respect of documents specified in Entry 91 of List I in the Seventh Schedule to the Constitution of India in the State of Maharashtra. Thus, an instrument is defined under MSA to include every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, etc. These documents that have been excluded, as aforesaid are governed under the ISA.
• From the above, it also becomes clear that the power to levy non-judicial stamp duty is concurrent under Entry 44 of List III. However, the power to prescribe rates of non-judicial stamp duty is divided between the Union and the State by Entry 91 of List I and Entry 63 of List II. (3) The scope of Entry 63 of List II and Entry 44 of List III came up for consideration before the Supreme Court in Bar Council of U.P. v. State of U.P. [(1973) 1 SCC 261: AIR 1973 SC 231], wherein the Supreme Court stated that ‘once it was held that the power to tax was within the competence of the State Legislature no question of repugnancy under Article 254 of the Constitution could arise’. 
• The inclusion of the rates on the specified documents in the Union List is with a view to keep them uniform throughout the country. The Centre can add new instruments to the aforementioned list only by a Constitutional Amendment. It is also important to note that under Article 268 of the Constitution, such stamp duties, as are mentioned in the Union List shall be levied by the Government of India but shall be collected: in the case of Union Territories by the Government of India; and in other cases by the states within which such duties are leviable. Thus, the proceeds in any financial year of any such duty leviable within any state shall not form part of the Consolidated Fund of India, but shall be assigned to that state.

II. Scheme of ISA and MSA – Important Legal Provisions:

1. The object of laws dealing with stamp dutyare three fold:

a. to raise revenue by taxing instruments (4) ;

b. to penalise by rendering an unduly stamped instrument to be inadmissible as evidence and also

c. to provide for penalty against evasions of Stamp duty.

i. by impounding of instruments,

ii. imposing penalty and

iii. by prosecuting defaulter for evasion. (5)

2. As per Section 2(14) of the ISA (6) , “Instrument” includes (a) every document by which any right or liability, is, or purported to be created, transferred, limited, extended, extinguished or recorded; (b) a document, electronic or otherwise, created for a transaction in a stock exchange or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and (c) any other document mentioned in Schedule I, but does not include such instruments as may be specified by the Government, by notification in the Official Gazette. Any instrument mentioned in Schedule I to Indian Stamp Act is chargeable to duty of the amount indicated in that Schedule as the proper duty (Section 3 of the ISA). The list includes instruments such as 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. (7)

Under the Maharashtra Stamp Act, 1958 (“MSA”) the term “instrument” includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt.

3. As per Section 2(26) of ISA, “stamp” means any mark, seal or endorsement by any agency or person duly authorised by the State Government, and includes an adhesive or impressed stamp, for the purposes of duty chargeable under the Act. In India we deal with two types of stamps, judicial and non-judicial. The Indian Stamp Act covers non-judicial stamps which are for use in transactions between persons where written instruments are used. Judicial stamps are otherwise known as “Court-fee” and judicial stamped papers bear the word “Judicial”, and are for use in courts and certain public offices under the provisions of the Court-fees Act 1870.

4. 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 rupee one is payable [Section 4(1) of ISA].

5. If one instrument relates to several distinct matters, stamp duty payable is aggregate amount of stamp duties payable on separate instruments (Section 5 of ISA).

General Power of Attorney.

It was held by the Hon’ble Supreme Court that a general power of attorney is a single instrument though comprises of distinct acts which the donor is capable of performing whether in his individual capacity or in his representative capacity as trustee or as executor or administrator – are not “distinct matters” and thus, do not attract the operation of Section 5 of the Indian Stamp Act. (8)

6. It may also happen that one instrument covering only one matter may come under more than one description given in Schedule to Stamp Act. In such case, highest rate specified among the different heads will prevail (Section 6 of ISA).

7. Government has the power to reduce or remit whole or part of stamp 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) of ISA].‘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) of the ISA].

8. 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 of ISA). Instrument executed out of India can be stamped within three months after it is first received in India [Section 18(1) of ISA]. 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 of ISA).

Section 17 of the MSA provides that all instruments chargeable with duty and executed in Maharashtra should be stamped before or at the time of execution or immediately thereafter or on the next working day following the date of execution. Moreover, as per Section 18 of MSA only Instruments executed out of Maharashtra may be stamped within three months after it is first received in India.

9. ISA and MSA both prohibit writing of a second instrument chargeable with duty on a stamp paper on which an instrument chargeable with duty has already been written (Section 14 of the MSA). Moreover, the stamp paper must be in the name of one of the parties to the transaction (Section 34 of the MSA). They cannot be in the name of the Chartered Accountant or Lawyer of the parties.

10. The stamp duty charged by the Legislature is on the instrument and is on the execution of the instrument. The measure of charging stamp duty may be fixed or ad-valorem which is to be determined by the Legislature. The basis for computation of stamp duty can be determined by the State Legislature and it may be on the basis of the market value of the property transferred or at a fixed amount. (9)

11. Parties by Agreement may decide as to who shall bear the amount of stamp duty. In absence of such an agreement reference be made to Section 29 of ISA or Section 30 of MSA, as the case may be.

12. Ordinarily, the person liable to pay stamp duty may himself assess the stamp duty payable by him 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 the Collector. He has to apply with draft document and prescribed fees and then the Collector will determine the stamp duty payable as per his judgment [Section 31(1) of ISA as well as Section 31 of the MSA].

13. ‘Duly Stamped’ means that the instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law in force in India [Section 2(11) of ISA]. (10)

14. In case of adhesive stamps, the stamps have to be effectively cancelled so that they cannot be used again (Section 12 of ISA & MSA).Similarly, impressed stamps have to be written in such a way that it cannot be used for any other instrument and stamp appears on the face of instrument (Section 13 of ISA & MSA). If stamp is not so used, the instrument is treated as ‘unstamped’. Similarly, when stamp duty paid is not adequate, the document is treated as ‘not duly stamped’.

15. 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 of ISA).

Validity of stamp paper and provisions pertaining to refund:

16. As per Section 54 of the ISA — When any person is possessed of a stamp or stamps which have not been spoiled or rendered unfit or useless for the purpose intended, but for which he has no immediate use, the Collector shall repay to such person the value of such stamp or stamps in money, deducting ten naye paise for each rupee or portion of a rupee, upon such person delivering up the same to be cancelled, and proving to the Collector’s satisfaction—

(a) that such stamp or stamps were purchased by such person with a bona fide intention to use them; and

(b) that he has paid the full price thereof; and

(c) that they were so purchased within the period of six months next preceding the date on which they were so delivered:

Provided that, where the person is a licensed vendor of stamps, the Collector may, if he thinks fit, make the repayment of the sum actually paid by the vendor without any such deduction as aforesaid.

17. In Thiruvengada Pillai Vs. Navaneethammal & Anr. [(2008) 4 SCC Online 530], it was held by the Supreme Court that a stamp paper, even if it is more than six months old, is valid to be used. Section 54 of the ISA just bars taking refund after six months of purchase, but it does not restrict the use of such old stamp paper for an agreement. Thus, nothing prohibits a person from using it even after years of its purchase. ISA does not have any prescribed period of limitation for its validity.

18. But the two states Maharashtra and Gujarat, have specific provisions that states that if a stamp is not used or surrendered back within six months of the date of issuing them, they will be treated as expired. Section 52B(b) of the MSA Act and Section 52C of Bombay Stamp (Gujarat Amendment) Act, 2016 states that if any stamp has been purchased and it is neither used nor any allowances are claimed on it within a period of six months, it will be treated as invalid. However, the stamps purchased and not used for intended purpose are entitled for refund after deduction of certain charges, if lodged for refund within six months from the date of purchase and on fulfilling the conditions stipulated in Chapter V of the MSA. (11) If the Stamp paper is unused or mutilated then a person may claim refund of the stamp duty. For this, claim shall be made to the collector of Stamps within a period of 6 months from the date of purchase of Stamps (Section 47 of MSA).

III. Evidentiary value of Unstamped/ under-stamped Instrument.

1. An instrument not ‘duly stamped’ cannot be accepted as evidence by civil court, an arbitrator or any other authority authorized to receive evidence (Section 35 of the ISA and Section 34 of the MSA). However, such a document can be accepted as evidence in criminal court. Chapter VII of the ISA provides for various penalties for breach or violation of provisions of the Act.

2. As per the provision of Section 59 of MSA, any person who, with the intention to evade the Stamp duty, executes or signs any instruments chargeable with stamp duty, otherwise than as a witness, without the same being duly stamped, shall on conviction, be punished with rigorous imprisonment for term which shall not be less than one month but which may extend to six months and with fine upto Rs. Five Thousand. Further, Section 67 and 68 of the MSA empowers the authorities to enter upon any premises and to inspect and impound/ seize the documents which are not duly stamped and burden is casted upon every public officer to assist the authorities in detection of evasion. The documents impounded for want of proper duty, attracts penalty @ 2 % per month from the date of execution of such document.

3. In a landmark judgment, the Hon’ble Supreme Court in SMS Teas Estates (P) Ltd Vs Chandmari Tea Co (P) Ltd, (2011) 14 SCC 66 held that where an arbitration agreement is contained in an unstamped/insufficiently stamped agreement, the provisions of the Indian Stamp Act 1899 (Indian Stamp Act) require the judge hearing the application under Section 11 application under the Arbitration and Conciliation Act, 1996 to impound the agreement and ensure that stamp duty and penalty (if any) are paid thereon before proceeding with the Section 11 application. This Judgment was again upheld by the Hon’ble Supreme Court even after the introduction of Section 11(6A) of the Arbitration and Conciliation Act in the case of Garware Wall Ropes Ltd vs CoastalMarine Constructions & Engineering Ltd. (12)

4. It is a settled law that in case of any suit or proceeding, any objection regarding the document being insufficiently stamped or for that matter as to the admissibility of the same has to be taken at the time when the same is sought to be tendered/admitted in evidence and on failure to do so, once document is marked as an exhibit, Section 35 of the MSA, creates an embargo to question such decision, at a later stage of the suit, or in higher Courts. This is more so, as neither the Code of Civil Procedure, nor the Evidence Act contains any provision for de-exhibiting any document. Thus, in absence of any statutory mandate in the Code of Civil Procedure or the Evidence Act to the contrary, the statutory prohibition as contained in Section 35 of the MSA has to prevail and a party is clearly precluded from calling into question the exhibition of a document on account of it being insufficiently stamped, at a later stage of the same Suit or in Higher Courts. (13) However, the concerned Stamp Authority is not precluded from recovering the stamp duty on such Instrument marked and admitted in evidence.

IV. Brief overview of the Amendments to the Indian Stamp Act, 1899 vide the Finance Act, 2019:

1. The amendments introduced in the Indian Stamp Act 1899 vide the Finance Act, 2019 were to be effective from 1st April, 2020. However, the Department of Revenue of the Ministry of Finance, India has issued two Notifications dated March 30, 2020 deferring the implementation of Part I of Chapter IV of the Finance Act, 2019 i.e. amendments pertaining to the Indian Stamp Act, 1899 (14) and corresponding enforcement of the Indian Stamp (Collection of Stamp-Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 (15) to July 1, 2020.

2. The Amendments to the Indian Stamp Act vide the Finance Act, 2019 have been brought about keeping in mind the technological advances in the field of security transactions through stock exchanges and depositories. Moreover, the primary objectives of the Amendment are-

a. to set up a zero-evasion centralised collection mechanism under which stamp duty is collected through one agency, at one place and on one instrument for securities market transactions.

b. to standardise the stamp duty payable on issuance, sale and transfer of securities market instruments. It does so by removing multiple instances of stamp duty, waiving stamp duty on certain instruments, and removing the ability of the State Governments to determine rates or levy stamp duty in addition to the Act.

3. The Finance Act, 2019 has introduced and/or amended certain definitions such as allotment list, clearance list, debentures, depositories, issuer, instruments, securities, stock exchange, etc.

4. The Amendment has introduced an inclusive definition of securities [Section 2(23A) of ISA] and expanded the scope of securities that have to be stamped under the Act. Now it not only includes securities as defined in Securities Contracts (Regulation) Act, 1956 (i.e. shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature) but also includes derivatives, certificate of deposit, commercial paper, repo on corporate bonds and other debt instruments as the Reserve Bank of India may specify and other instruments which the Central Government may notify.

5. Prior to the Amendment under the Finance Act, 2019, only debentures which qualified as ‘marketable security’ (i.e. being capable of being sold in any stock market in India or the UK) attracted stamp duty under Article 27 of ISA. The term ‘debentures’ was not defined separately in the Act.

In case of mortgaged debentures, if the mortgage-deed was stamped and registered appropriately (such mortgage would be subject to relevant State stamp legislations i.e. MSA in the State of Maharashtra), then debentures would be exempt from stamp duty.

Moreover, transfer of debentures were liable to stamp duty under the relevant State stamp legislations [Article 59(a) of Schedule I to the MSA]. As a result, only a portion of the debenture transactions in India were liable to stamp duty under ISA while most other transactions were being stamped under the relevant State stamp legislations. However, the Finance Act, 2019 has resulted into key changes in relation to levy and collection of stamp duty in relation to debentures and other securities.

6. The exemption from stamp duty on transfer of securities in dematerialized form has been removed. Hence, now on transfer of dematerialized securities, in addition to securities transaction tax (“STT”) will also attract the additional cost of stamp duty, thereby increasing the transaction costs. For instance, transfer of shares through a stock-exchange on a delivery basis will now in addition to the STT of 0.1% on the price, also be subjected to stamp duty at the rate of 0.015% on the price of the shares transferred. However, under the Amended Section 8A of the ISA, the transfer of registered ownership of securities from a person to a depository (i.e. conversion of physical or materialized securities to dematerialized securities) or from a depository to a beneficial owner (conversion of dematerialized securities to physical or materialized securities) shall continue to be exempted.

7. Introduction of Part AA under Chapter II “AA.—Of the liability of instruments of transaction in stock exchanges and depositories to duty”. Section 9A provides for instruments chargeable with duty for transactions in stock exchanges and depositories whereas Section 9B provides for Instruments chargeable with duty for transactions otherwise than through stock exchanges and depositories (i.e. physical transfer of securities). The said Sections 9A & 9B can be summarised as under:

Section	Transaction leviable to duty	What is liable to stamp duty?	Who will pay?	Who will collect on behalf of the State Government?	What is stamp duty calculated on?
9A(1)(a)	Sale of securities through a stock exchange	Sale (as in the clearance list)	Buyer (16)	Stock Exchange or Clearing Corporation	Market value of such securities at the time of settlement of transactions in securities
9A(1)(b)	Transfer of securities for consideration, made by a depository [not covered u/s 9A(1)(a)]	Transfer	Transferor	Depository	Consideration amount
9A(1)(c)	Creation or change in the records of a depository pursuant to an issue of securities	Allotment List	Issuer	Depository	Total market value of securities contained in the allotment list
9B(a)	issue of securities is made by an issuer otherwise than through a stock exchange or depository	Each such issue	Issuer	Paid directly to State Government	total market value of the securities so issued
9B(b)	sale or transfer or reissue of securities for consideration is made otherwise than through a stock exchange or depository	each such sale or transfer or reissue	seller (17) or transferor or issuer, as the case may be	Paid directly to State Government	on the consideration amount specified in such instrument

8. Other important points pertaining to instruments specified under Section 9A are as under-

– Instruments specified above shall be chargeable to duty at the rate specified in Schedule I and that such instrument need not be stamped

– No duty shall be chargeable in respect of the instruments of transaction in stock exchanges and depositories established in any International Financial Services Centre set up under section 18 of the Special Economic Zones Act, 2005. (18)

– Clearance list is each client’s list of transactions of sale and purchase relating to contracts traded on the stock exchange. Following the Amendment, this clearance list will be deemed to be the principal instrument on which the stamp duty shall be payable and no additional stamp duty shall be charged on any other instruments in relation to the same sale or purchase of securities on the stock-exchange. (19)

– No stamp-duty shall be charged or collected by the State Government on any note or memorandum or any other document, electronic or otherwise, associated with the transactions mentioned Section 9A.

– After the amendment, incidence of stamp duty shall be either on buyer or seller and not on both as was prevailing earlier in case of listed securities. (for example:- under the MSA in case of transfer of listed shares, stamp duty of 0.01% was charged from both buyer as well seller)

– Under the present regime of levy and collection, one of the major concerns were the multiple demands for stamp duty raised by different State Governments on the same instrument. To prevent this, the Amendment has provided for a uniform process by which the stamp duty is to be levied, collected and retained by the respective State Governments.

– The stock exchange/ clearing corporation/ the depository, as the case may be, shall, within three weeks of the end of each month and in accordance with the rules made in this behalf by the Central Government [i.e. Indian Stamp (Collection of Stamp- Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019], in consultation with the State Government, transfer the stamp-duty collected to the State Government where the residence of the buyer is located and in case the buyer is located outside India, to the State Government having the registered office of the trading member or broker of such buyer and in case where there is no such trading member of the buyer, to the State Government having the registered office of the participant. Moreover, before such transfer, the stock exchange or the clearing corporation authorised by it or the depository shall be entitled to deduct such percentage of stamp-duty towards facilitation charges as may be specified in such rules.

9. Under the Act, the stamp duty is calculated on the value of the security according to the average price or the value thereof as on the date of the instrument (Section 21 of the ISA). However, after the Amendment, the stamp duty shall now be calculated on the market value of the security and this will ensure that in case of listed securities, the stamp duty is levied on the exact price on which it is transacted and not on the average price of the day.

10. It is pertinent to note that even though, the stamp-duty shall be collected (a) from the buyer in the case of sale of securities through stock-exchange; (b) from the seller in the case of sale of security otherwise than through a stock-exchange or depository; (c) from the transferor in the case of transfer of security through a depository; the Amendment does not alter the enabling provision under Section 29 of the Act that allows parties to a transaction to agree to allocate the cost as per their commercial arrangement.

11. The Amendment has introduced a new penalty provision (i.e. Section 62A) to ensure that collection and transfer of stamp duty is done in a timely manner. It provides that if any person required to collect the stamp duty, fails to collect the stamp duty or fails to transfer the stamp duty so collected within 15 days of the expiry of the time specified, it shall be punishable with fine which shall not be less than Rs.1,00,000/- but which may extend up to 1% of the collection or transfer so defaulted.

V. Changes made under MSA on account of COVID Pandemic:

1. The Government of Maharashtra with a view to finance the Vital Important Urban Transport Project in the region of Mumbai Metropolitan Regional Development Authority (MMRDA), Pune, Pimpri-Chinchwad and Nagpur Municipal Corporations had levied 1% Surcharge in addition to the prevailing stamp duty rates on the instruments of Sale, Gift and Usufructuary Mortgage with effect from 8th February, 2019 and amendment to that effect was carried by way of inserting Section 149(A) to the Maharashtra Municipal Corporation Act, 1949 and Section 144 (F) to the Mumbai Municipal Corporation Act, 1888.

2. Thereafter, the Government of Maharashtra has vide its order dated 28th March, 2020 by modifying the provisions of Section 149 (A) of the Maharashtra Municipal Corporation Act, 1949 and Section 144 (F) of the Mumbai Municipal Corporation Act, 1888 granted a concession of 1% on aggregate stamp duty and applicable surcharge payable on the instruments of Sale, Gift and Usufructuary Mortgage thereby reducing the stamp duty rates by 1%. Such concession of 1% shall remain in force for the period of 2 (two) years from1st April, 2020 in the areas falling under the Mumbai Metropolitan Region Development Authority (MMRDA) and municipal corporations of Pune, Pimpri-Chinchwad and Nagpur.

Ready Reckoner of previous year i.e. 2019-20 to continue:

3. As per the Maharashtra Stamp (Determination of True Market Value of Property) Rules, ASR (popularly known as ‘Ready Reckoner’) for properties in Maharashtra are revised every year on 1st April. Considering the difficulty in revising ASR due to spread of Novel Coronavirus (Covid 19), the Chief Revenue Controller Authority and Inspector General of Registration & Stamp Controller vide its Order dated 26th May, 2020 declared that ASR, valuation rules and guidelines of previous year (i.e. 2019-2020) shall continue to apply from 1st April, 2020 till further order of the State Government.

4. Stamp duty registration offices have begun functioning from 18th May, 2020 at Old Customs House, Andheri, Kurla and Borivali. Only agreements for sale and mortgage are being allowed to be registered. Citizens have to first obtain an e-pass online and only then they are allowed to enter the offices. (20)

VI. Ready Reckoner of Rate of stamp duty on certain important instruments within the State of Maharashtra as laid down in Schedule I of the MSA as well as on certain important instruments under the ISA:

CERTAIN IMPORTANT INSTRUMENTS MENTIONED IN SCHEDULE I OF THE MSA
Article	Description of Instrument	Stamp Duty
4	Affidavit, that is to say, a statement in writing purporting to be a statement of facts, signed by the person making it and confirmed by him on oath or; in the case of persons by law allowed to affirm or declare instead of swearing, by affirmation. Exemptions Affidavit or declaration in writing when made– (a) as a condition of enrolment under the Air Force Act, 1950, (XLV of 1950) the Army Act, 1950 (XLVI of 1950) or the Navy Act, 1957 (LXII of 1957);  (b) for the immediate purposes of being filed or used in any Court or before the officer of any Court; or  (c) for the sole purpose of enabling any person to receive any pension or charitable allowance.	₹ 100
5(A)	Agreement or Memorandum of an Agreement relating to-
5A(a)	Sale of a Bill of Exchange	0.005% of the amount of a bill of exchange
5A (b)	Purchase or sale of a Government security	0.005% of the value of security at the time of its purchase or sale, as the case may be
5A (c)	relating to purchase or sale of shares & securities, scrips, stocks, bonds, debentures, debenture stocks or any other marketable security of a like nature in or of any incorporated company or other body corporate	0.005% of the value of securityat the time of its purchase or sale, as the case may be
5A (e)	relating to purchase or sale of bullion or species	0.005% of the value of gold or silver or sovereigns, as the case may be
5A (g-a)(i)	Development Rights Agreement	Same as in the case of a Conveyance (i.e. Article 25) as on the market value of the property (21)
5A (g-a)(ii)	relating to purchase of units in any scheme by an investor from a developer  – when the investor sells the unit a set-off of the duty paid would be allowed against duty on Conveyance under Art.25	Same as in the case of a Conveyance as on the market value of the Unit
5A(g-d)	relating to transfer of tenancy rights in:
	For non-residential use of any size; or For residential use with an area more than 300 sq. feet	Same as Article 60 (i.e. on the market value of the property depending upon the location of the property)
	For residential use with an area up to 300 sq. feet	Higher of ₹ 50 / 100/ 200 (depending upon the location of the property
5A(g-e)	relating to hire purchase	Same duty as Article 36
5A(h)(i)	relating to certain advertising contracts	If the amount agreed does not exceed ₹ 10 lakh- Two rupees and fifty paise for every rupees 1,000 or part thereof on the amount agreed in the contract subject to minimum of rupees 100. where amount agreed exceed Rs.10 lakhs – Five rupees for every rupees 1,000 or part thereof on the amount agreed in the contract
5A(h)(ii)	relating to contracts for exclusive broadcasting / exhibition rights of a film
5A (h)(iii)	relating to specific performance by a person where contract > ₹ 100,000
5A(h)(v)	relating to assignment of Copyrights
5A(h)(iv)	relating to creation of any obligation, right or interest and having monetary value	If the amount agreed is up to of ₹ 10 lakhs- One rupee for every rupees 1,000 or part thereof on the amount agreed in the contract subject to minimum of rupees 100. Where amount agreed exceeds Rs.10 lakhs -Two rupees for every rupees 1,000 or part thereof on the amount agreed in the contract.
5A (h)(vi)	Project under Built, Operate and Transfer (BOT) system, whether with or without toll or free collection rights	If amount agreed does not exceed Rs.5 lakhs – One rupees for every rupees 1,000 or part thereof on the amount agreed in the contract subject to minimum of rupees 100 Where amount agreed exceeds Rs.5 lakhs- Two rupees for every rupees 1,000 or part thereof on the amount agreed in the contract.
5(B)	General (not otherwise provided for) – No duty shall be chargeable on agreements or its record covered under sub-clauses (b) and (c) of this article, if proper duty is paid under article 51A.	Rs.100/-
5	Exemptions: Agreement or its records or Memorandum of Agreement– (a) for or relating to the purchase or sale of goods or merchandise exclusively, not being an agreement or memorandum of agreement chargeable under entry (d), entry (e), entry (f) or entry (g) of this Article or a note or memorandum chargeable under Article 43;
6	Agreement for Deposit of Title Deeds, Pawn, Pledge or Hypothecation Deposit of title deeds securing amount of loan or for pawn, pledge or hypothecation securing amount of loan (Exemption: Letter of hypothecation accompanying a bill of exchange.)	If the amount secured is up to ₹ 5,00,000- Re. 1 for every ₹ 1,000 or part thereof of the amount secured by the deed subject to the minimum of one hundred rupees. In all other cases- ₹ 2 for every ₹ 1,000 or part thereof for the amount secured by such deed
10	Articles of Association of a Company On the share capital, thereof subject to a nominal capital or increased share capital (Exemption-  Companies registered under Section 25 of the Companies Act, 1956)	One thousand rupees for every rupees, 5,00,000 or part thereof, subject to a maximum of Rs. 50,00,000 (22)
12	Award by an Arbitrator or Umpire (not being an Award directing a Partition) [Exemption: Award under section 18 of the Bombay Hereditary Offices Act, 1874 (Bombay III of 1874) or section 330 of the Maharashtra Municipalities Act, 1965 (Maharashtra XL of 1965)] The expression “Award” used in Schedule I does not include foreign arbitral awards and hence, no stamp duty is payable on the same Shriram EPC Ltd. Vs. Rioglass Solar SA(2018) 18 SCC 313: 2018 SCC OnLine SC 1471	on the amount of value of the property to which the award relates as set forth in the award-  The same duty as Bond (Article 13), subject to a minimum of One hundred rupees. In any other case: ₹ 100.
13	Bond not being a debenture and not being otherwise provided for by any provisions of this Act (whether or not such provisions relate to any particular types of Bonds), or by the Bombay Court-fees Act, 1959 (Bombay XXXVI of 1959) for every rupees five hundred or part thereof [Exemption– Bond when executed by any person for the purpose of guaranteeing that the local income derived from private subscriptions or a charitable dispensary or hospital or any other object of public utility shall not be less than a specified sum per mensem.]	Five rupees subject to a minimum of rupees one hundred
15	Cancellation – Instrument of, if attested and not otherwise provided for. (Exemption: Revocation of will)	₹ 100
17	Certificate or Other Document – evidencing the right or title of the holder thereof, or any other person either to any shares, scrip or stock in or of, any incorporated company or other body corporate, or to become proprietor of share, scrip or stock in or of, any such company or body (the value of shares, scrip or stock includes the amount of premium, if any)	Re.1 for every ₹ 1,000 or part thereof, of the value of the shares, scrip or stock.
24	Composition Deed	₹ 200
25	Conveyance (not being a transfer charged or exempted under Article 59) (on the true market value of the property which is subject matter of conveyance)
25(a)	Movable Property	₹ 15 for every ₹ 500 or part thereof
25(b)	Immovable Property
	Within the Municipal Corporation or any Cantonment area annexed to it or any urban area	5% of market value of property
	Within the limits of any Municipal Council / Nagar Panchayat /Cantonment annexed to it or any rural area within MMRDA	5% of market value of property
	Within the limits of any Gram Panchayat	4% of market value of property
25(c)	If relating to both movable and immovable property	The same duty as is payable under clauses (a) and (b)
25(d) (23)	High Court order under Section 394 of the Companies Act, in respect of amalgamation or reconstruction of companies	10% of aggregate of the market value of shares issued or allotted in exchange or otherwise and the amount of consideration paid for such amalgamation but not exceeding the higher of the following: i) 5% of true market value of the immovable property located in Maharashtra of the transferor company or ii) 0.7% of aggregate of the market value of shares allotted in exchange or otherwise and consideration paid, for such amalgamation. In case of reconstruction or demerger the duty chargeable shall not exceed the higher of the following– (i) an amount equal to 5 per cent of the true market value of the immovable property located within the State of Maharashtra transferred by the Demerging Company to the Resulting Company; or (ii) an amount equal to 0.7 per cent, of the aggregate of the market value of the shares issued or allotted to the Resulting Company and the amount of consideration paid for such demerger.
	Special Points for Conveyance: An Agreement to Sell an immovable property, where the possessionof any immovable property is transferred or agreed to be transferred to the purchaser before the execution, or at the time of execution, or after the execution of, such agreement then such agreement to sell shall be deemed to be a conveyance and stamp duty shall be levied accordingly. The provisions of Section 32A of MSA shall apply mutatis mutandis to such agreement which is deemed to be a conveyance as they apply to a conveyance under that section. However, a set off of the duty paid shall be given at the time of execution of the conveyance. Assignment of copyrights is exempt from stamp duty. In case of amalgamation / reconstruction of companies, the market value of the shares of Transferee Company is the value of shares on stock exchange on the "appointed day" mentioned in the scheme or else the date of the court’s order. If the shares are not listed or not quoted, the market value means the value of shares to the transferor company or the value as determined by the Collector.
32	Exchange	Same duty as on a conveyance but on the market value of that property which has the greater value
34	Gift, Instrument of- not being a Settlement (Article 55) or Will or Transfer (Article 59)	Same duty as on conveyance.
	However, if the property is gifted to a family member being the husband, wife, brother or sister of the donor or any lineal ascendant or descendant of the donor,	Theamount of duty chargeable shall be at the rate of 3% on the market value of the property which is the subject matter of the gift.
	Gift of residential / agricultural property is made to husband, wife, son, daughter, grand-son, grand-daughter or wife of deceased son. (24) (25)	₹ 200
	Note: As per Section 2(la) of the MSA "instrument of gift" includes, where the gift is of any movable or immovable property but has not been made in writing, any instrument recording whether by way of declaration or otherwise the making or acceptance of such oral gift; The scope of the term relative/ family member under the MSA is restricted to husband, wife, brother or sister of the donor or any lineal ascendant or descendant of the donor unlike that of the scope of the term relative under the Income Tax Act. (26) Under Section 17 of the Registration Act, 1908 any instrument of gift of immovable property shall be compulsorilyregistered, even if made to a relative. Moreover, as per Section 18 of the Registration Act, 1908, it is optional to register Instrument of gift of movable property. Registration fees on Instrument of gift (other than gift of residential / agricultural property made to husband, wife, son, daughter, grand-son, grand-daughter or wife of deceased son) is 1% on true market value of the immovable property gifted or Rs.30,000/-, whichever is less. In the State of Gujarat under Article 28 (27) of Schedule I to the Bombay Stamp Act, 1958 as applicable to the State of Gujarat, on Gift- instrument of not being a Settlement or will or Transfer: – the stamp duty payable is 3.5% of the market value of the property being gifted. In the State of Tamil Nadu under Article 28 of Schedule I to the Tamil Nadu Stamp Act, 2013, stamp duty on Instrument of Gift not being a Settlement or Will or transfer (Article 53), is as below:  Article Description Stamp duty 28(i) in favour of family member; One rupee for every one hundred rupees or part thereof of the market value of the property which is the subject matter of Gift. 28(ii) in any other case. The same duty as a Conveyance (Article 21) for the market value of the property which is the subject matter of Gift. In the State of Karnataka under Article 28 of Schedule I to The Karnataka Stamp Act, 1957, stamp duty on Instrument of Gift is as below:- Article Description Stamp duty 28 (a) Donee not a family member 5.00 for every 100.00 on Market Value (same as applicable on Conveyance) 28(b) Donee is a family member Property situated within limits of Bangalore Metropolitan Regional Development Authority or Bruhat Bangalore MahanagaraPalike or City Corporation– Rs.5000/- Property situated within limits of City or Town Municipal Council or Town Panchayat area – Rs.3,000/- Property situated within any other limits – Rs.1,000/- Provided that, if the property is situated in any of the combinations of limits, mentioned in items (i), (ii) and (iii) above the duty payable shall be the maximum of the duties specified in items (i), (ii) and (iii) above.]   Explanation: Family in relation to the donor for this purpose means father, mother,husband, wife, son, daughter, daughter-in-law, brothers, sisters and grandchildren.
35	Indemnity Bond	₹ 500
36	Lease including under lease or sub-lease and any agreement to let or sub-let or any renewal of lease, where lease period is i) up to 5 years ii) 5 years to 10 years with a renewal clause iii) 10 years to 29 years with a renewal clause iv) exceeding 29 years or for indefinite period or for perpetuity	Same Duty as is payable on conveyance under Clause (a) (b) or (c) as the case may be of Article 25 on: i) 10% of market value ii) 25% of market value iii) 50% of market value iv) 90% of market value
	Special Points for Lease: Consideration such as premium, security deposit, advance, will for market value be treated as consideration passed on. The renewal period, if specifically mentioned, shall be treated as part of the present lease. The market value, for the instruments falling under section 2(n)(iii) (Toll Agreements) and article 5(g-e) (Hire Purchase agreement), shall be the total contract value and they shall be chargeable to duty same as under clause (a) of article 25 An agreement for lease will not be treated as lease if there is no immediate demise – State of Maharashtra Vs. Atur India P Ltd., (1994) 2 SCC 497
36A	Leave & Licence Agreement-
(a)	For a period not exceeding 60 months with or without a renewal clause	0.25% of the total sum of: • Licence fees or rent payable under the agreement; plus • Non-refundable deposit or or money advanced or to be advanced or premium; plus • Interest @ 10% p.a. on the refundable security deposit or money advanced or to be advanced
(b)	For a period exceeding sixty months with or without renewal clause;	Same duty as is leviable on lease, under clause (ii), (iii) or (iv), as the case may be, of Article 36.
37	Letter of Allotment of Shares in any company or proposed company, or in respect of any loan to be raised by any company or proposed company.	Re. 1
39	Memorandum of Association (Exemption – Memorandum of any Association not formed for profit and registered under Section 25 of the Companies Act, 1956, (I of 1956))	if accompanied with Articles – ₹200/- and if not so accompanied- Same duty as on Articles of Association under Article 10
40	Mortgage Deed– not being an agreement relating to [Deposit of Title Deeds, Pawn or Pledge or Hypothecation (Article 6)], Bottomry Bond (Article 14), Mortgage of a Crop (Article 41), Respondentia Bond (Article 53), or Security Bond or Mortgage Deed (Article 54)
a)	Where possession is given	Same duty as on conveyance on the amount secured by the deed
b)	Where possession is not given	₹5 for every ₹ 1000 or part thereof (approx. 0.5%) for the amount secured by such deed, subject to a Maximum of ₹ 10,00,000 and a Minimum of ₹ 100
c)	When a collateral or auxiliary or additional or substituted security, or by way of further assurance for the above-mentioned purpose where the principal or primary security is duly stamped.	The same duty as a Bond (Article 13) for the amount secured, subject to a maximum of Rs.200/-.
	Notes: A mortgagor who gives to the mortgagee a power of attorney to collect rents, or a lease of the property mortgaged or part thereof, is deemed to give possession within the meaning of this article. Where in the case of an agreement to mortgage the amount or part thereof sought to be secured by such an agreement is advanced or disbursed to the mortgagor or without execution of a mortgage deed, then such an agreement to mortgage shall, notwithstanding anything contained in Section 2(d) of MSA, become chargeable under this Article as mortgage-deed on the date of making of such advance or disbursement either in part or in whole Exemptions–  (1) Instruments executed by persons taking advances under the Land Improvement Loans Act, 1883 (XIX of 1883), or the Agriculturists’ Loans Act, 1884 (XII of 1884), or by their sureties as security for the repayments of such advances. (2) Letter of hypothecation accompanying a bill of exchange.
46	Partition	₹ 10 for every ₹ 500 or part thereof (approx 2%) of the amount or the market value of the separated share or shares of the property
	Special Points: The largest share remaining after the property is partitioned (or, if there are two or more shares of equal value and not smaller than any of the other shares, then one of such equal shares) shall be deemed to be that from which the other shares are separated. The value of largest share remaining after the partition will be excluded for duty. Provided that – When an instrument of partition containing an agreement to divide property in severalty is executed and a partition is effected in pursuance of such agreement, the duty chargeable upon the instrument effecting such partition shall be reduced by the amount of duty paid in respect of the first instrument, but shall not be less than five rupees; Where instrument relates to partition of agriculture land, Stamp duty shall be ₹ 100. Where a final order for effecting a partition passed by any Revenue Authority or any Civil Court or an award by an arbitrator directing a partition, is stamped with the stamp required for an instrument of partition, and an instrument of partition in pursuance of such order or award is subsequently executed, the duty on such instrument shall not exceed ten rupees. In case of order of partition by a Civil Court rebate will be given to the extent of the Court Fees paid (28) .
47	Partnership including an LLP, Joint Venture to run a business, earn profits and to share profits, whether in cash or in kind Instrument of Partnership where-
1(a)	No contribution or where cash contribution does not exceed ₹ 50,000	₹ 500
1(b)	Cash Contribution exceeds ₹ 50, 000	₹ 500 for every ₹ 50,000 or part thereof. subject to a maximum of ₹ 15,000 (w.e.f. 24-4-2015)
1(c)	Contribution by way of property (not cash)	Same as on a conveyance on the market value of property
47(2)	Dissolution of Partnership or Retirement of partner a) where any property is transferred to a partner other than the one who brought it b) in any other case	Same as on a conveyance on the market value subject to a minimum of ₹ 100 ₹ 500 (w.e.f. 24-4-2015)
48	Power of Attorney-
(a)	for sole purpose of registration	₹ 100
(b)	for suits or proceedings under the Presidency Small Causes Courts Act, 1882
(c)	for acting in a single transaction to one or more person
(d)	for acting in more than one transaction or generally to one person
(e)	for acting in one or more transactions or generally to one or more persons
(f)	(i) for or without consideration and authorising to sell an immovable property	Same as on a conveyance on the market value
	(ii) for authorizing to sell immovable property without consideration and given to parents, siblings, spouse, children, grandchildren, father-in-law, mother-in-law and siblings of the spouse	₹ 500
(g)	for construction, development, sale etc. to a developer or promoter	The same duty as is leviable on a Conveyance under clauses (b), (c) or (d), as the case may be, of Article 25, on the market value of the property:
(h)	In any other case	₹100 for each person authorised
	Special Points: 1. In case of (f), set off of duty paid will be given on execution of the conveyance (Explanation II to Article 48) 2. Duty payable under (g) will be ₹ 100 only if duty is already paid under Article 5 (g-a) on Development Rights’ Agreement [Second proviso to Article 5(g-a)(i)]
52	Release whereby a person renounces a claim upon other person or against any specified property
	If the release deed of an ancestral property or part thereof is executed by or in favour of brother or sister (children of renouncer’s parents) or son or daughter or son of predeceased son or daughter of predeceased son or father or mother or spouse of the renouncer or the legal, heirs of the above relations.	₹ 200
	Every other Case	Same duty as on a conveyance as on the market value of the share, interest or part renounced
54	Security Bond or Mortgage Deed–  where such security bond or mortgage deed is executed by way of security for the due execution of an office, or to account for money or other property received by virtue thereof, or by a surety to secure the due performance of a contract, or in pursuance of an order of the court or a public officer, not being otherwise provided for by the Bombay Court-fees Act, 1959, (Bombay LX of 1959),-	Wherethe amount secured does not exceed ₹2500- The same duty as Bond (Article 13) for the amount secured. Where the amount secured exceeds ₹2500  for every₹500 of the amount secured or part thereof:- same duty as is leviable under Article 40 (b) (i.e.₹5 for every ₹ 1,000/- or part thereof of the amount secured subject to minimum of ₹100/- and Maximum of ₹ 10,00,000/-)
	Exemptions: Bond or other instrument, when executed,- (a) by any person for the purpose of guaranteeing that the local income derived from private subscription to a charitable dispensary or hospital or any other object of public utility shall not be less than a specified sum per mensem; (b) under the rules made by the State Government under section 114 of the Maharashtra Irrigation Act, 1976 (Maharashtra XXXVIII of 1976); (c) by a person taking advance under the Land Improvement Loans Act, 1883 (XIX of 1883) or the Agriculturists Loans Act, 1884 (XII of 1884) or by their sureties as security for the repayment of such advances; (d) by officers of the Government or their sureties to secure the due execution of an office or the due accounting for money or other property received by virtue thereof.
58	Surrender of Lease without consideration with consideration	₹ 200 Same duty as on a Conveyance on amount of consideration
59(a)	Transfer of marketable debentures (29)	Re.0.50 for every ₹100/- of the consideration amount of the debentures
61A	Trust- Declaration of – of, or concerning, any property when made by any writing not being a Will,-
	a) where there is disposition of property
	i) for charitable or religious purpose	2% of the sum settled or market value of the property
	ii) in any other case where there is disposition of property	Same as on a conveyance on the amount settled or market value of the property
	b) where there is no disposition of property	The same duty as a Bond (Article 13) for a sum equal to the amount settled or market value of the property settled, but not exceeding [two hundred rupees].
61B	Revocation of – of, or concerning, any property when made by any instrument other than a Will.	The same duty as a Bond (Article 13) for a sum equal to the amount settled or market value of the property settled, but not exceeding two hundred rupees.
63	Works Contract, that is to say, a contract for works and labour or services involving transfer of property in goods (whether as goods or in some other form) in its execution and includes a sub-contract,-
(a)	Where the contract value does not exceed ₹ 10 lakhs	₹ 100
(b)	Where the contract value exceeds ₹ 10 lakhs	₹100 + ₹100 for every rupees 1,00,000 or part thereof, above rupees ten lakh, subject to the maximum of rupees five lakh
SOME IMPORTANT INSTRUMENTS UNDER INDIAN STAMP ACT
Prior to Finance Act, 2019 i.e. upto 30.06.2020
27	Debentures (whether a mortgage debenture or not), being a marketable security transferable	0.05% per year of the face value of the debenture, subject to the maximum of 0.25% or Rs.25,00,000/- whichever is lower. (30)
62(a) (31)	Transfer of shares	Twenty five paise for every hundred rupees or part thereof of the value of the share.
Post Finance Act, 2019
27 (32)	Debentures (33)
(a)	Issuance of Debenture	0.005%
(b)	Transfer and re-issue of debentures	0.0001% (0 % upto 30.06.2020)
56A (34)	Security other than Debentures
(a)	Issue of security other than debenture	0.005%
(b)	Transfer of security other than debenture on delivery basis	0.015%
(c)	Transfer of security other than debenture on non-delivery basis	0.003%
(d)(i)	Futures derivates (equity and commodity)	0.002%
(d)(ii)	Options derivatives	0.003%
(d)(iii)	Currency and interest rate derivatives	0.0001%
(d)(iv)	Other derivatives	0.002%
(e)	Government Securities	0%
(f)	Repo on corporate bonds	0.00001%

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