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STAMP DUTIES

Important provisions of the Bombay Stamp Act

1. Applicability

The Act applies to the whole of the State of Maharashtra. It is adopted by the state of Gujarat with certain amendments applicable to State of Gujarat only. It also has a separate schedule prescribing different rates of duty.

2. Charging — S. 3

An instrument when executed in the state is liable to stamp duty at the rate provided in Schedule I. Any instrument executed outside the state is liable to duty only on receipt of such instrument or its copy in the state, provided it relates to a property situated in the state or a matter or thing to be done in the state. The charge of duty is created only on execution of an instrument specified in Schedule I, and not otherwise. Stamp duty is not levied on a transaction, but is leviable on an instrument.

3. Instrument — S. 2(1)

"‘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."

4. Instrument of gift — S. 2(1a)

"‘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." Subsequent recording of an oral gift is liable to stamp duty.

5. Instrument of partition — S. 2(m)

"‘Instrument of partition’ means any instrument whereby co-owners of any property divide or agree to divide such property and includes —

  1. any final order for effecting a partition passed by any revenue authority or any civil court,

  2. an award by an arbitration directing a partition, and

  3. when any partition is effected without executing any such instrument, any instrument or instruments signed by the co-owners and recording, whether by way of declaration of such partition or otherwise, the terms of such partition amongst the co-owners."

The expression ‘co-owners’ includes all kinds of co-ownership such as joint tenancy, tenancy in common, coparcenary, membership of HUF, etc. and the partnership.

6. Conveyance — S. 2(g)

"‘Conveyance’ includes —

  1. a conveyance on sale,

  2. every instrument,

  3. every decree or final order of any Civil Court,

  4. every order made by the High Court u/s. 394 of the Companies Act, 1956 in respect of amalgamation of companies;

by which property, whether movable or immovable or any estate or interest in any property is transferred to, or vested in any other person inter vivos and which is not otherwise specifically provided for by Schedule I."

7. Executed and Execution – S. 2(i)

"‘Executed’ and ‘execution’ used with reference to instruments mean ‘signed’ and ‘signature’."

8. Market value – S. 2(na)

"‘Market value’ in relation to any property which is the subject matter of an instrument, means the price which such property would have fetched if sold in open market on date of execution of such instrument or consideration stated in the instrument whichever is higher."

9. Duly stamped – S. 2(h)

"‘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 for the time being in force in the State."

10. Instruments for several matters

An instrument wherein several properties are dealt with should be charged with the aggregate amount of the duties with which separate instruments are chargeable.

11. Instrument under several descriptions

An instrument covered under two or more descriptions in Schedule I should be charged with only the highest of duties specified in Schedule I.

12. Use of adhesive stamps

The following instruments at the option of the person may be stamped with adhesive stamps:

  1. Acknowledgement

  2. Agreement

  3. Certificate

  4. Delivery order

  5. Letter of Allotment

  6. Mortgage of a crop

  7. Notarial Act

  8. Note

  9. Transfer, and

  10. Warrant for goods.

All other instruments are to be stamped with impressed stamps only. Any person affixing any adhesive stamp is required to cancel the same at the time of affixing the same.

13. Duty how to be paid

Payment of duty is to be indicated by means of adhesive or impressed stamps on the instruments. If stamps are not available on account of shortage, then duty may be paid in cash, by demand draft or pay order in any Government Treasury. The fact of payment has to be endorsed on the instruments by the Authorities on production of the receipt or challan. Use of franking machine for impressions is valid where authorised by Chief Controlling Revenue Authority.

14. Time for payment

All instruments liable to be stamped should be stamped before or at the time of execution of instrument or immediately thereafter on the next working day following the date of execution.

15. Purchase of stamp paper

In case of use of impressed stamps, the same should be purchased in the name of one of the parties to the instrument.

16. Period for use

The stamps should be used within 6 months from date of purchase. Any stamps not used within this period shall be invalid. Application for refund of stamp duty in specified cases like spoiled stamps, etc. shall be made within 6 months from the date of purchase of stamps.

17. Duties by whom to be paid

As per S. 30, duty is to be paid by a buyer on a conveyance and by the lessee on a lease. In cases of Bonds, Release, Settlement, it is to be paid by the person making or drawing the instrument. In case of exchange, it is to be paid by the parties in equal shares and in case of partition, by the parties in proportion to their respective shares. In all other cases, it is to be paid by the person executing the instrument.

18. Adjudication of stamp

A person can seek the opinion of the Collector of Stamps by making an application to him for adjudication of stamp duty payable by such person on the instrument. For this purpose, the person who is a party to the instrument has to furnish a true copy of the instrument and an affidavit stating the facts and such other evidences as required, along with a fee of Rs. 100/-. The Collector’s opinion is final and conclusive. No appeal lies against his order of adjudication.

19. Consequences of undervaluation or short payment

  1. Any officer registering any instrument of conveyance, exchange, gift, certificate of sale, deed of partition or power of attorney to sell immovable property, deed of settlement or transfer of lease or any person with authority to receive evidence or any person in charge of public office before whom such instrument is presented, may

    1. give notice for payment of adequate stamp duty by making up the deficit and penalty at 2% p.m. of the deficit (not exceeding 200% of the deficit) or

    2. refer a true copy of such instrument to the Collector, if he has reason to believe that it is undervalued.

  2. On receipt of the instrument by the Collector, he can call for the difference between the amounts of duty payable and actually paid.

  3. In addition, he has to levy penalty of 2% p.m. (not exceeding 200% of the deficit) of differential amount of duty or part thereof, where the persons mentioned in as have not levied any penalty.

  4. Such instrument will not be admitted in evidence by any person having the authority to receive evidence, and/or registered unless penalty of 2% p.m. of the deficient stamp duty (not exceeding 200% of the deficit) is paid along with unpaid duty.

  5. Every person with authority to receive evidence and every person in charge of public office can impound such an instrument when produced before such person.

  6. On receipt of impounded document, the Collector can collect deficiency in stamp duty along with penalty of an amount equal to 2% p.m. (not exceeding 200% of the deficit) of the deficit portion of stamp duty or part thereof subject to a minimum penalty of Rs. 100.

  7. A person can be punished with rigorous imprisonment for up to 6 months (not less than 1 month) and with fine up to Rs. 5,000, if it is proved that the instrument was undervalued or short payment of duty was made with intention to evade duty.

Schedule I Rates (Important articles)

MAHARASHTRA
Article Description Stamp Duty
4

Affidavit

Rs. 20
(Exemption: for use in the Court or Tribunal)  
5 AGREEMENT relating   
a)  to shares & securities Re. 1 for every Rs. 10,000 or part 
b) to hire purchase same duty as on lease — Art. 36
c) to transfer tenancy rights (per sq. metre)

Commercial

Residential 

i) Greater Bombay Rs. 2000 Rs. 200
ii) Thane, Pune, Nagpur, Navi Mumbai Rs. 1000 Rs. 100
iii) Other Municipal Corporation Rs. 400 Rs. 50
d) to give power to a promoter  for development, sales, etc. of immovable property Rs. 5 for every Rs. 500 or part
e) General Rs. 20
6

Agreement for deposit of title deeds, pawn, pledge or Hypothecation

  
1. for deposit of title deeds securing amount of loan of Rs. 1 to Rs. 50 lacs and above. Rs. 50 to Rs. 50,000
2. for pawn, pledge or hypothecation securing amount of loan, (repayable after 3 mths) of  
i) up to Rs. 5,00,000 i) Rs. 100 for every Rs. 1,00,000
ii) over Rs. 5,00,000 ii) Rs. 500 plus Rs. 250 for every Rs. 1,00,000 or part in excess of Rs. 1,00,000
iii) loan for export of goods iii) Rs. 100 for every Rs. 1,00,000
(50% of above where loan is repayable within 3 months)    
7

Appointment in execution of a power in writing not being a will

 
* of trustees Rs. 100
* of properties Rs. 250
9

Apprenticeship deed

Rs. 50
(Other than Articles clerkship for Attorneys)   
10 Articles of Association of a company on the share capital, nominal capital or increased share capital (Exemption S. 25 companies) Rs. 1,000 for every Rs. 5,00,000 or part thereof subject to a maximum of Rs. 50,00,000
12 Award Maximum Rs. 100
13 & 14

Bond and Bottomry bond

Rs. 20 for every Rs. 500 or part
15 Cancellation (Exemption: Revocation of will) Rs. 100
17 Certificate or other document (Shares, Scrip, Stock, etc. including amount of premium) Re. 1 for every Rs. 1,000 or part
24

Composition Deed

Rs. 200
25 Conveyance (on the market value)   
* Movable for every Rs. 500 or part thereof Rs. 15
* Immovable   
a) Rural (BMR) for every Rs. 500 or part thereof Rs. 35
b) Rural (MPAPRA) for every Rs. 500 or part thereof Rs. 25
c) Rural (any) (residential) for every Rs. 500 or part thereof Rs. 5
d) Rural (any) non residential for every Rs. 500 or part thereof Rs. 15
e) 'C' class MC, and Cantonments, Hill Station MCs etc. for every Rs. 500 or part thereof Rs. 20
f) 'B' class MC etc. for every Rs. 500 or part thereof Rs. 25
g) 'A' class MC etc. for every Rs. 500 or part thereof Rs. 30
h) Municipal Corporations, BMR MCs, Deolali, Dehu Road, Ahmednagar for every Rs. 500 or part thereof Rs. 40
i) Municipal Corporations of Greater Bombay, Pune, Thane (including adjoining areas) Navi Mumbai, Lonavala, Mahabaleshwar, Panchgani, Panhala, and Matheran for every Rs. 500 or part thereof Rs. 50
* Concession in rates of residential premises etc.   
a) by or in favour of a Co-op. Hsg. Society   
b) where provisions of Maharashtra Ownership Flats Act or Mah. Apartment Ownership Act apply   
c) by Society in favour of its member or incoming member (by share or otherwise)  
d) by a member to another member including an incoming member  
e) purchase of land in cases covered by (a) to (d) above   
   Applicable Rates  
   Value up to Rs. 1 lac Nil
   Value - Rs. 1 lac to Rs. 2.50 lacs 0.5% of the value
  Value - Rs. 2.50 lacs to Rs. 5.00 lacs Rs. 1,250 + 3% of value over Rs. 2,50,000
   Value - Rs. 5.00 lacs to Rs. 10.00 lacs Rs. 8,750 + 6% of value over Rs. 5,00,000
   Value - Above Rs. 10.00 lacs Rs. 38,750 + 8% of value over Rs. 10,00,000
   Amalgamation
Under the order of High Court u/s. 394 of the Companies Act, 1956
10% of MV of shares allotted in exchange and consideration if any paid but not exceeding the higher of:
  i) 7% of MV of the immovable property in Maharashtra or
ii) 0.7% of MV of shares allotted in exchange and consideration if any paid.

Notes:

1.

An agreement for sale providing for transfer of possession shall be deemed as ‘Conveyance’.

2. 

Such agreement may be impounded in cases of inadequate stamp duty and may not be admitted  in evidence.

3. 

Set off will be given at the time of conveyance  of the duty paid on agreement.

4. 

In case of transfer involving movable and immovable duty will be calculated on the value of the items separately.

5.

In case of amalgamation market value of shares of transferee company will be the value of shares on stock exchange on the “appointed day” as per the scheme otherwise the date of the court's order. In case where shares are not listed or not quoted, the value of shares to the transferor company or the value determined by the collector.

27

Counterpart/duplicate

Maximum Rs. 20
28

Customs or excise bond (where value exceeds Rs. 2,500)

Maximum Rs. 100
29

Delivery Order of goods from port, dock, warehouse etc. by owner WHEN VALUE OF SUCH GOODS EXCEEDS Rs. 100

Rs. 10 for every Rs. 10,000 or part thereof
31

Marriage registration

Rs. 50
32

Exchange

Same duty as on conveyance on the value of that property having greater value
34 Gift (other than a settlement, will or transfer) Same duty as on conveyance
35

Indemnity Bond 

Rs. 200
36 Lease including sub-lease:   
a)  where rent is fixed and no premium is paid or payable; Duty as on conveyance on:
i)  lease up to 3 years i) average annual rent
ii)  3 years to 10 years ii) 3 x avg. annual rent
iii)  10 years to 29 years without a renewal clause iii) 5 x avg. annual rent
iv)  exceeding 29 years & 10 years with renewal clause iv) 10 x avg. annual rent
b)  where premium is fixed and no rent is payable Duty as on conveyance on the amount of premium
c)  where both premium and rent are payable Aggregate of (a) and (b) above

Notes:

  

1. 

Rent paid in advance will be treated as premium

  

2. 

Taxes, repairs etc. payable by lessee will be treated as rent

  

3. 

An agreement for lease will not be treated as lease if there is no immediate demise

  
36A

Leave & License

 
a) With fee or rent without security deposit or money advanced   
Without renewal  
i) Up to 1 year Rs. 2,000
ii) Up to 3 years Rs. 10,000
iii) Exceeding 3 years As per A-36 lease
b) With security deposit or money advanced with or without fee or rent As per A-36 — Lease plus 1% of the security deposit or money advanced
37

Letter of allotment of shares

Re. 1
39

MEMORANDUM OF ASSOCIATION OF A COMPANY

  
a)  if accompanied with Articles Rs. 200
b)  if not so accompanied Same duty as under Article 10
40

Mortgage Deed

  
a)  where possession is given Same duty as on conveyance on the amount secured
b)  where possession is not given Rs. 10 for every Rs. 500 or part subject to a maximum of Rs. 2,00,000
c) collateral Rs. 200
42

Notarial Act

Rs. 25
46

Partition

Rs. 10 for every Rs. 500 or part of the value of the separated share or shares

Notes:

 

1. 

The value of largest share will be excluded for duty

  

2. 

In case of order of partition by a Civil Court rebate will be given to the extent of the Court Fees paid

 

3.

0.5% in case of agricultural land

 
47

Partnership

  
1.  Instrument of   
A. Contribution in cash   
a)  where share of contribution does not exceed Rs. 50,000 Rs. 500
b)  where it exceeds Rs. 50,000 for every Rs. 50,000 or part subject to a maximum of Rs. 5,000 Rs. 500 
B. Contribution by way of property Same duty as on conveyance under A.25 on the market value of property
2.  Dissolution or Retirement   
a)  where any property is transferred to a partner other than the one who brought it Same duty as on conveyance under A.25 on the market value subject to min. of Rs. 100
b)  in any other case Rs. 200
48

Power of Attorney

  
a)  for sole purpose of registration Rs. 100
b)  for suits in small causes court Rs. 100
c)  for acting in a single transaction to one or more person Rs. 100
d)  for acting in more than one transaction or generally to one person Rs. 100
e) for acting in one or more transactions or generally to one or more persons Rs. 100
f)  for consideration and authorisation to sell an immovable property Same duty as on conveyance on the market value
g)  for construction, development, sale etc. to a developer or promoter Rs. 5 for every Rs. 500 or part
h)  in any other case Rs. 5 for each person

Notes :

 

1. 

In case of (f), set off will be given on conveyance

  

2. 

Persons belonging to one firm shall be deemed to be one person

 

3.

Duty payable will be Rs. 100 only while duty is already paid under article 5 (g-a) on agreement to give power of attorney

  
52 Release
where value exceeds Rs. 2,500
Rs. 200 
54

Security Bond

Rs. 10 for every Rs. 500 or part of the amount secured subject to a maximum of Rs. 2,00,000
55

Settlement

  
A.  a)  for charitable or religious purpose Rs. 10 for every Rs. 500 or part
b)  in any other case Same duty as on conveyance
B.  Revocation Maximum Rs. 200
58

Surrender of Lease 

Duty as per A.36
61

Trust

  
A.  a)  where there is disposition of property   
i)  for charitable or religious purpose Rs. 10 for every Rs. 500 or part
ii)  in any other case Same as on conveyance
b)  where there is no disposition Maximum Rs. 200
B.  Revocation Maximum Rs. 200

 

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