Indian Stamp Act
Presented by:
Shri Santi Kr. Roychowdhury
Dy. Inspector General of Registration (H.Q.)
Directorate of Registration & Stamp Revenue
Finance (Revenue) Department, West Bengal
Stamp Act - An Overview
• The Stamp Act is a fiscal statute dealing with tax on
transactions.
• The tax is levied in shape of stamps on instruments
recording the transactions. This form of taxation has
been criticized by many as unsound and uneven in
incidence but it has been found to be convenient for
collection and supervision.
• The law is mostly modeled on English Law. English
decisions have furnished valuable guidance in the matter
of administration of the law in India.
• In the past century, a considerable body of Indian case
law has accumulated. The numerous rulings of the
Revenue Boards also form useful precedents.
Stamp Act - An Overview
• The revenue derived from such duties forms a
considerable part of the revenue of the State.
• Under the Constitution, the entire proceeds of the duties
are assigned to the State in which they are levied.
• In our state, revenue collected in the shape of stamp
duties and registration fees is the second highest, after
the commercial taxes.
• With regard to the instruments of commercial nature, the
power to prescribe the rates of duties is vested in the
Union Legislature (entry 91 of the Union List) and the
power to reduce and remit such duties is vested with the
Central Government.
Stamp Act - An Overview
• The power to prescribe the rates of duties on other
instruments is vested in the State legislature (entry 63 of
the State List) or reduce such duties is vested in the
State Government.
• All matters relating to the mechanism of collection and
management of stamp duties in respect of both the
classes of Instruments are the subject of entry 44 of the
Concurrent List.
• The act was originally enacted in 1899 and the Indian
Stamp Act, 1899 is in force in the whole of India except
the State of Jammu and Kashmir.
Stamp Act - An Overview
• Some states like Gujarat, Maharashtra, Karnataka and
Kerala have the separate acts enacted about them.
• National Institute of Public Finance & Policy is an
institute, headed by the Principal, Dr. Mathur, for the
State Secretaries of Stamps.
• The body has drafted a new Indian Stamp Act which is
under active consideration of the Union Ministry of
Finance.
• If the said bill is enacted a new act will come into force
for all the States.
Stamp Act - An Overview
• In the proposed act, some sections have been
introduced, some new sections have been newly framed
according to the changed scenario and some sections
have been modified.
• But the spirit remains the same.
Stamp Act - The Preamble
In the preamble it is stated :• "Whereas it is expedient to consolidate and amend the
law relating to stamps, it is hereby enacted as follows:“
• It shows that it is not only an amending Act but also a
consolidating Act.
• The Stamp Act is exhaustive and indicates that all the
former Acts on the subject of Stamps have been
collected.
• There are 78 sections in the Act and Schedule 1A has
65 articles for determining rates of stamp duties on 65
types of instruments.
Stamp Act - The Definition
• This gives the definitions of the terms used in the Act.
The interpretation of terms contained in this section are
useful only for the purpose of this Act.
• Section 2(a) – Collector
– means within the limits of the toms of Calcutta, Madras
and Bombay, the Collector of Calcutta, Madras and
Bombay respectively and without those limits , the
Collector of a district and
– includes a Deputy Commissioner and any Officer whom
the State Government may, by notification in the Offlcial
Gazette, appoint in this behalf.
Stamp Act - The Definition
– All registering officers have been declared Collector u/s 41
and 42, uh.16 in our State.
– DIGR have been declared Collector under sec. 47A of the
I.S. Act, 1899. Different states different sections
• Section 2 (12) - 'Executed' and 'execution' used with
reference to instruments mean "signed"' and "signature".
The term 'execution.
– When applied to a document is the last act or series of
acts which completes it. Thus execution of deeds is the
signing, sealing and delivery of them in the presence of
witnesses.
Stamp Act - The Definition
• 2(11) "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 India.
• 2(14) "Instruments" includes every document by which
any right or liberty is or purports to be created,
transferred, limited, extended, extinguished or recorded.
• 2(21) "Power of Attorney" includes any instrument
empowering a specified person to act for and in the
name of the person executing it.
Stamp Act - The Definition
• 2(24) "Settlement" means any non-testamentary
disposition in writing of movable or immovable property
made –
– in consideration of marriage
– for the purpose of distributing property of the settler among
his family or those for whom he desires to provide or for
the purpose of providing for some persons dependent on
him or
– for any religious or charitable purpose and includes an
agreement in writing to such a disposition
Stamp Act - Section 3
• every instrument mentioned in Schedule 1A, which, not
having been previously executed by any person, is
executed in India on or after the first day of July,1899
• every bill of Exchange payable otherwise than on
demand or promissory note drawn or made out of India
on or after that day and accepted or paid or presented
for acceptance or payment or endorsed, transferred or
otherwise negotiated in India, and
Stamp Act - Section 3
• every instrument mentioned in schedule 1A which
previously not having been executed by any person, is
executed out of India on or after that day relates to any
property situated, or any matter or thing done or to be
done, in India and is received in India - shall be
chargeable with duty of the amount indicated in the
Schedule, as the proper duty there for; provided that no
duty is chargeable in respect of
– any instrument executed by or on behalf of or in favour of
the Government in cases where, but for this exemption,
the Government would be made liable to pay the duty
chargeable in respect of such instrument
Stamp Act - Section 3
• Instruments not mentioned in the schedule are not
subject to duty.
• Wills are not subject to duty because there is no mention
of them in Schedule. A decree of a court in terms of an
award is not an instrument chargeable with stamp duty
nor petitions and compromises and solenamahs filed in
court. But Award affecting partition is chargeable with
duty.
Stamp Act - Section 4 & 9
• Section 4 –
– While several instruments used in single transaction of
sale, mortgage or settlement, the principal instrument only
shall be chargeable with the duty. The parties will
determine which will be the Principal Instrument, the duty
chargeable on the instruments shall be the highest duty.
Stamp Act - Section 4 & 9
• Section 9 –
• Power to reduce, remit or compound duties :• The Government may by rule or order published in the
Official Gazette –
– reduce or remit, whatever prospectively or retrospectively,
in the whole or any part of the territories under its
administration, the duties with which any instrument or any
particular class of instrument or any of the instruments
belonging to such class or any instruments when executed
by or in favour of any particular class of persons or by or in
favour of any member of such class are chargeable.
Stamp Act - Section 4 & 9
– Provide for the composition or consolidation of duties in
the case of issues by any incorporated company or other
body corporate or debentures, bonds or other marketable
securities.
• In this section Government means Union Government
for Union List and State Government for State List
Stamp Act - Section 11 & 27
• Section 11 –
• Adhesive Stamps may be used for
–
(a) Bill of Exchange and promissory note drawn out of
India
–
(b) Entry as an advocate, vakil or attorney on the roll of a
High Court
–
(c) Notarial acts; and
–
(d) Transfers by endorsement of shares in any company
or other body corporate
– Adhesive stamp used should be cancelled under section 12
Stamp Act - Section 11 & 27
• Section 27 –
• The market value or the consideration (if any) and all
other facts and circumstances affecting the chargeability
of any instrument with duty or the amount of the duty
with which it is chargeable, shall be fully and truly set
forth therein in
– not done punishable under section 64 of this Act
Stamp Act - Section 11 & 27
• A deed of Gift which contains no statement of the value
of the property gifted does not require stamp duty as per
language of Article 33, but the omission to set forth the
value is a contravention of section 27 and a prosecution
will lie against the person who executed the document
under section 64 of the Act, if it is to be found that there
was an intention to defraud the Government.
Stamp Act - Section 29 & 31
• Section 29 :• In absence of an agreement to the contrary the expense
of providing the proper stamp shall be borne by such
persons as mentioned in the section :– Bond, Debenture, mortgage, release, settlement etc. by
the person drawing, making or executing such instrument
– conveyance- by purchaser
– lease - by lessee
– exchange by parties in equal shares
– partition - by the shares there to in proportion to their
respective shares
Stamp Act - Section 29 & 31
• This section is not exhaustive and makes no reference to
several instruments.
• An agreement to bear the costs of preparation of an
instrument implies an agreement to pay stamp duty also
on it.
Stamp Act - Section 29 & 31
• Section 31 –
• Adjudication as to proper stamp
• Any instrument, executed or not, stamped or not , may
be brought by any person for the opinion of the Collector
as to the duty with which the instrument is chargeable A fee not exceeding Rs.5.00 is to be paid for such
adjudication. The Collector shall determine the duty, with
which, in his judgement, the instrument is chargeable.
– Collector may require an abstract copy of the document
– Affidavit or other evidence to prove that section 27 is
complied with
Stamp Act - Section 32
• After adjudication, the Collector shall certify by
endorsement on such instrument that the full duty with
which it is chargeable has been paid.
– when not chargeable, the Collector shall certify accordingly
– endorsement made by Collector shall be deemed to be
duly stamped
Stamp Act - Section 32
• Nothing in this section shall authorize the Collector to
endorse
– if the document, when executed in India, is brought after
one month of execution
– if the document, when executed out of India, is brought
after three months after it has been first received in India.
Stamp Act - Section 32
• The opinion of the Collector of stamps with regard to
valuation of stamp duty is only tentative, which is subject
to its acceptance or rejection by the court after a regular
trial. A mere letter from the Collector expressing his
opinion that no stamp duty was necessary is not a
certificate which is contemplated by section 32(2) and
hence is not binding or conclusive in the court.
• When after payment of stamp duty, certificate is
endorsed on the instrument, the certificate is conclusive
and there shall be no further objection as to the stamp
duty of that document.
• Even the Collector cannot review his decision and cancel
or modify his endorsement once made on instrument
Stamp Act - Section 33
• Examination and Impounding of Instruments
• Every person having by law or consent of parties
authority to receive evidence and every person in charge
of public office, except an officer of police, before whom
any instrument, chargeable in his opinion, with duty, is
produced or comes in the performance of his function,
shall, if it appears to him that such instrument is not duly
stamped impound the same
• Exemption – ( i ) Magistrate or judge of criminal court
– ( ii) In case of Judge of High Court, power is delegated to
such officer of court.
Stamp Act - Section 33
• State Govt. may determine what office will be the Public
Office W.B. Amendment in 1990:
• Collector can also impound when brought to him u/s 31
but not the document which is not executed.
• Collector may suo moto call for original instrument when
deficiency is noticed from any copy of the same
document.
• Documents must be produced or comes "in performance
of his function" not otherwise.
Stamp Act - Section 35, 38, 41, 42, 43, 47A
• Section 35• Instruments not duly stamped inadmissible in evidence
• Section 38• Instruments impounded how dealt with
• After collection of deficit stamp duty and payment of
penalty an authenticated copy/original of the document
shall be sent to the Collector
• The penalty to be levied by court is ten times the
deficient stamp duty subject to a minimum of Rs.5. the
Collector may refund the penalty in excess of Rs.5.00
under sec.39
Stamp Act - Section 35, 38, 41, 42, 43, 47A
• Section 41 –
• Instruments unduly stamped by accident
• If any document is produced by any person of his own
motion before the Collector within one year from the date
of its execution or first execution and the person offers to
pay the stamp duty and the Collector is satisfied that the
omission is occasioned by accident, mistake or urgent
necessity will receive the deficit stamp duty and will not
proceed u/s 33.
• In different states including West Bengal, Registering
Officers are the Collector under this section.
Stamp Act - Section 35, 38, 41, 42, 43, 47A
• Section 42 –
• Endorsement of Instrument on which duty has been paid
under section 3 5,40 and 41
• Section 43 –
• Prosecution against stamp law :
• No prosecution unless it appears to the Collector that the
offence was committed with the intention of evading of
proper duty.
Stamp Act - 47A & 49
• Section 47A –
• Almost every State has amended this section introducing
market value.
– West Bengal Amendment :•
•
•
•
Agreement to sale
Conveyance
Exchange
Gift
Stamp Act - 47A & 49
• Partition
• Power of Attorney
– Given for consideration
• Settlement
• Transfer of lease by way of assignment
• Prevention of Under-Valuation of Instruments Rules,
2002
• 47B - Appeal
Stamp Act - 47A & 49
• Section 49 –
• Allowances for spoiled stamps
– Collector may make allowances for spoiled impressed
stamps
– Time for application in section 50
– Stamp on any paper inadvertently and undesignedly
spoiled, obliterated or by error in writing or by any other
means rendered unfit for the purpose intended before any
instrument written thereon is executed by person
Stamp Act - 47A & 49
– Stamp on any document which is written out wholly or in
part but not executed
– Afterwards found void in law
– Found unfit by reason of any error or mistake
– By reason of death of the person by whom it required to be
executed
– Refusal of any person to execute
Stamp Act - 50, 52, 53, 54, 55 & 56
• Section 50 –
– Application when to be made :a.in some case two months
b.within six months after the stamp has been spoiled
• Section 52 –
– Allowances for misused stamps
• Stamp of a description other than that prescribed for
instrument
• A stamp of greater value than was necessary Collector
may cancel or allow as spoiled and misused
Stamp Act - 50, 52, 53, 54, 55 & 56
• Section 53 – Allowances for spoiled and misused stamps
• By other stamps of same description
• Stamp of any other description of same amount
• Same value in money
• Section 54 – Allowance for stamp not required for use
• Not for immediate use
– Collector's satisfaction as to
• Purchased by the person with a bonafide intention to
use them
• That the full price is paid
• Within six months
• Section 55 & 56 – Chief Controlling Revenue Authority
Stamp Act - 62, 63, 64, 69, 70, 71, 74
• Section 62 –
– Penalty for executing instruments not duly stamped
• Section 63 –
– Penalty for failure to cancel adhesive stamp
• Section 64 –
– Penalty for omission to comply with provision of section 27
• Section 69 –
– Penalty for breach of rule relating to sale of stamps and for
unauthorized Sale
Stamp Act - 62, 63, 64, 69, 70, 71, 74
• Section 70 –
– Sanction of Collector or such other Officer authorized by
State Govt.
– Chief Controlling Revenue Authority or any officer
authorized
• Section 71 –
– Presidency Magistrate
– Second class magistrate have the jurisdiction for such trial
• Section 74 –
– Power to make rules relating to sale of stamps
Thank You