Chapter-2
Stamp Duty
(STAMP DUTIES)
A. Liability to pay stamp duty
(OF LIABILITY OF INSTRUMENTS TO DUTY)
Section 3 : Dutiable Documents :
Subject to this Act, and to the exceptions given under Schedule-1, stamp duty must be levied on the documents mentioned below, as mentioned in the said Schedule-1.
(a) Stamp duty shall be levied on the documents referred to in Schedule-1, if drawn up in India after 1-7-1899.
(b) any other bill of exchange, or promissory note, except those drawn to be payable immediately on demand, which may have been drawn outside India on or after 1 7 1899; Where such promissory note or bill of exchange is accepted, paid, or presented for acceptance, or presented for payment, or endorsed, or drawn, or otherwise negotiated in India, stamp duty is chargeable (and)
(c) any document referred to in Schedule 1, other than a bill of exchange, or a promissory note, may have been written outside India by a person on or after 1 7 1899. (The person should not have written A document earlier). The property mentioned in the document may be situated in India. Or the subject matter mentioned in the document may be to be enforced in India. Or it may have been adopted in India. Stamp duty is levied on such documents.
At the same time, notwithstanding clauses (a) and (c) of this section and Schedule-1 (except where specifically exempted by this Act), the amount referred to in Schedule-1(a) shall be levied as stamp duty on the documents mentioned below (Schedule-1 subject to the exceptions provided in (a).
(aa) If the documents referred to in Schedule-1(a) are written in the State of Andhra Pradesh on or after 1-4-1922 (the person not having written the document before then), stamp duty shall be levied on the document in the manner mentioned in the Schedule.
(bb) a document referred to in Schedule-1(a) and liable to stamp duty under that Schedule, may have been written outside Andhra Pradesh on or after 1 4 1922. (The document should not have been written before that date). The property mentioned in that document may be located in Andhra Pradesh. Or the point mentioned in that document may be to be implemented in Andhra Pradesh. Or maybe adopted in Andhra Pradesh. Stamp duty is levied on such documents.
However, no stamp duty shall be levied on the following documents.
(1) Documents written by, or on behalf of, or in the name of the Government, (for such exemption to apply, the Government must be liable to pay stamp duty on the document).
(2) No stamp duty shall be levied on documents relating to the purchase, transfer, mortgages or interests in respect of a ship or watercraft registered under the Merchant Shipping Act, 1894, or Act 19 of 1838, or the Registration of Ships Act, 1841.
(3) No stamp duty shall be levied on documents relating to developers and units in connection with the achievement of the objectives of the Special Economic Zones. (This clause was inserted in 2005 when the Special Economic Zones Act, 2005 came into force)
Explanation : In relation to this clause, for the words 'developer', special economic zone', 'unit', in section (2) (g), (jud-a), (jud-c) of the "Special Economic Zones Act, 2005", clause Meaning given below. This law also applies.
Commentary
To fully understand this section, one must know Schedule-1, Schedule-1(a) attached to this Act, about the division of stamp duty between the Center and the States. Briefly, the documents subject to stamp duty and the details of stamp duty levied on them are contained in Schedule-1, Schedule-1(a). No stamp duty is levied on documents not covered by those two schedules. At the same time, the central and state governments also have the power to issue notifications exempting certain types of documents from the scope of stamp duty.
The central government levies stamp duty on certain types of documents. The stamp duty paid on such documents belongs to the Central Government. A list of those documents is in Schedule 1. State governments levy stamp duty on certain types of documents. The stamp duty paid on such documents goes to the exchequer of the respective state governments. Details of such documents are in Schedule-1(a). What we have to understand by this is that Schedule-1 belongs to the Central Government and Schedule-1(a) to the State Governments. In that order Schedule-1(A) for the purposes of this book shall be considered as pertaining to the States of Andhra Pradesh and Telangana.
What should be noted about this section is that although it is true that this section mainly applies to documents executed in India, in special cases such as the relevant property being in India and the document being executed in India, stamp duty is also payable on documents executed abroad as per this Act. At the same time, this section exempts the government (Central or State Governments) from paying stamp duty in cases where stamp duty is payable.
The main thing to note about this section, and this Act, is the exemptions. Notwithstanding this section, the Central and State Governments have the power to issue orders and notifications exempting certain types of documents from stamp duty, even if not specifically mentioned in this section. Therefore, before paying stamp duty on a document, it is not only necessary but also appropriate to find out from the concerned authorities whether the document is exempted from paying stamp duty or not.
Another thing to know about this section is the date of writing of the document. It is called date of in English
It is called execution. Stamp duty is constantly changing. Because market values and prices change
Hence, the governments are likely to change the stamp duty frequently accordingly. Thus a document
On the date of writing, stamp duty is payable as for the time being in force. However, stamp duty
A document payable, in cases where registration is required, is the date on which the document is registered
Considered written. A document, for example, is registered a month after it is actually written
Could be. If the stamp duty has changed in the meantime, then the stamp duty as on the date of registration has to be paid
There is It is necessary to note this difference in the case of Date of execution.
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