Stamp Act

By
Prof Dr.Vasundhara Patil
 Definition of stamp duty
The Oxford Dictionary of Law
defines “stamp duty” to mean a
tax payable on certain legal
documents specified by statute;
the duty may be fixed or ad
valorem.
Under the Constitution of India, the power to levy
stamp duty is divided between the Union and the
State

The Parliament (Central Government) has the

power to levy stamp duty on the instruments
specified in Article 246 read with Schedule VII,
List I, Entry 91
the State Government has the power to levy stamp
duty on instruments falling under Article 246 read
with Schedule VII, List II, Entry 63.
 Two •Central Act
Stamp acts •State Act
 The Central Act
The Indian Stamp Act
The State Stamp Act
 The central Act called
The Indian Stamp Act 1889
It applicable to union territories
and provisions of stamp duty
relating to some instruments like
bill of exchange , cheques ,transfer
of shares etc applicable to all the
states.
 State Acts:-

In case of States, the rates prescribed by individual

States will prevail in those States.
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).
 Conflict between State and
Central law (UnionLaw)

Article 254 of Constitution

states that
the Union law prevails
What is purpose of Indian Stamp Act?

To raise revenue for the local governments

payment of stamp duty imparts legality to
the document
 imparts authenticity to the document
document gets evidentiary value
is admitted as evidence in court.
The Bombay Stamp Act, 1958 is applicable in the
State of Maharashtra

This Act is intended to levy Stamp duty on certain

types of documents executed in the State or brought
from outside for acting upon the same in the State

The rates at which stamp duty is levied on these

documents are mentioned in Schedule
. How is Stamp Duty payable?

1. Using Stamp paper

2. Using adhesive stamps
3. Franking
4.E stamping
Non judicial stamp paper
non judicial adhesive stamp
 Who pays stamp duty ?
By both parties to the documents
equally
Or
As mutually decided between the
parties
In whose name is the stamp paper required to be
purchased?

The stamps are required to be purchased in the

name of one of executors to the instrument .

What is period of validity of stamp paper?

Stamp paper is valid for six months from the date

of purchase
 What point of time of Stamp Duty
payable. ?
The Section 17 & 18 of the Act states the time of
payment stamp duty. Generally all the instruments
executed in the state shall be stamped before or at the
time of execution or immediately thereafter or on the
next working day following the day of execution.
Similarly, the instruments which is executed out of the
state and within three months from its receipt in the
state, shall be stamped.
What are the consequences of not paying Stamp duty?

Part 1) documents looses its evidentiary value.

The documents if not duly stamped, shall not be

admissible in evidence in the court of law.

Part 2 –If the documents are impounded by the

competent authority then there is provision for
payment of penalty form the date of execution of
documents impounded.
What are the consequences of not
paying Stamp duty?
Part 3) Section 59 any person who, with the intention
to evade the Stamp duty, executes or signs any
instruments chargeable with stamp duty, 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 be
extended upto six months and fine upto Rs. Five
Thousand
Section59 -punishment for evading stamp duty -
Rigourous imprisonment form one month to six
months and fine upto Rs 5000/-
Is there any exemptions for
payment of stamp duty?

The registered cooperative

housing societies are
exempted from paying stamp
duty
On what basis (Carpet, Built-up or Super
built-up ) are the rates fixed by the stamp
authorities ?

For the purpose of determination

of True Market Value, the Built-up
area is taken into account.