Section 3 (a): (This section was added in 1971, deleted in 1973).
Section 4 : Cases where several documents are drawn up in respect of a single transaction, in case of sale, mortgage, transfer :
In some cases:
(1) In the case of sale, mortgage or settlement, several instruments may be required to be executed in connection with the completion of a single transaction. In such cases, stamp duty is payable under Schedule-1, or Schedule-1(a) as the case may be, on the main document only.
In that order, if the main document is a document subject to stamp duty under Schedule-1, stamp duty of one rupee or five rupees is levied on the remaining (subsidiary or unimportant) documents. Or if the principal document is a document subject to stamp duty under Schedule 1(a), stamp duty of five rupees shall be levied on the remaining (subsidiary, or unimportant) documents. (Although specific stamp duty is prescribed under Schedule-1 or Schedule-1(a) on such supplementary, non-essential documents),
(2) Within sub-section (1) the relevant parties may ascertain which of the documents is the main document.
At the same time, among the fees levied on the respective documents, the stamp duty levied on the document considered as the main one should be more than the stamp duty levied on the other documents.
Commentary
This section does not apply in all cases. Applies only to sale, mortgage and transfer deeds. More than one document must be written to complete the process. All the documents should be related to the same transaction. For example, when a property is sold which is already mortgaged in a bank, the sale has to be subject to the mortgage only. The Supreme Court has held in one instance that although mortgage and sale appear to be two transactions, in reality both are treated as a single transaction. (Somaiaya Organics (India) Ltd., Vs. Board of Revenue U.P. 1986(1)SCC 351 = AIR 1986 SC 403). 26 2, though the scope of this section is limited, it has to be considered as a section of substantive importance.
Section 5 : Stamp duty on different items in same document :
When several distinct matters are involved in a single document, each matter shall be treated as a separate matter for which stamp duty is payable under this Act. In such cases the average stamp duty of all such items shall be payable on that document.
Commentary
Section 4 is the complete opposite of this section. Where there is more than one document but the subject matter is the same, Section 4 applies. It is sufficient to pay stamp duty only on the main document. Conversely, when the document is the same but involves different items, stamp duty is levied on each item. For example, even if there are three mortgages on the same property and the entire mortgage arrears are settled through a single document, stamp duty is levied separately in respect of the three mortgage arrears. The following judgment will help to further understand the scope of this section.
- Chief Controling Revenue Authority Vs. Coastal Gujarat Power Ltd., and others 2015(10)
SCC 700.
Indian Stamp Act 1899
15
Section 6 : Circumstances in which the same document under Schedule-1 can be treated in two ways- Stamp Duty :
An instrument so famed as to come with in two or more of the descriptions in schedule 1 or schedule 1(A) more stamp on which interpretation If there is a possibility of duty, then higher stamp duty will be levied accordingly. (Section (5) is subject to this section).
However, nothing contained in this Act shall render chargeable with duty exceeding five rupees a counter part or duplicate of any document.
Commentary
Although this section is close to section (4) in some respects and to section (5) in some respects, there is the same difference between sections 4, 5 and 6. Therefore it is necessary to interpret and understand these three sections carefully. As we have already learned about Sections 4 and 5, now let us know about Section (6). A bond, a promissory note, is a good example of the scope of this section. Because both are very similar. Such documents are called ambiguous instruments. Section (6) applies when a document is liable to be construed as a promissory note or bond. Promissory Note, Bonds on whichever is more stamp duty is levied. (Bond, promissory note explained in clauses (5) and (22) of section (2).
(5) Chief Controlling Revenue Authority Vs. The judgment of the Supreme Court in the case of Coastal Gujarat Power Ltd., is applicable to this section.
Section 7: Water Insurance Policies - Stamp Duty :
Sub-sections 1, 2 and 3 are omitted.
(4) May be insured in respect of water travel. Similarly, insurance may be taken for a specific period of time. Or a vessel may be insured for more than 30 days from the time it reaches a particular destination and anchors. In such cases, stamp duty is levied on the sum insured, taking into account the period of sea journey as well.
Section 8: Stamp duty on debentures, bonds etc. issued by local bodies :
(1) A local body may issue bonds, debentures or other securities as part of the collection of debt under the Local Bodies Debts Act, 1879 or under any other law for the time being in force. Accordingly, duty shall be levied at the rate of one per cent on the total value of the bonds, debentures and securities so issued. But, notwithstanding anything contained in this Act, no additional stamp duty shall be payable on such securities, debentures or bonds, or in cases of extension, consolidation or subdivision thereof.
(2) Exemption from levy of stamp duty provided under sub-section (1). of all outstanding loans of the kind mentioned therein. (whether stamp duty paid or unpaid on securities, debentures, bonds).
However, bonds and debentures issued by the local body before 26-3-1897. to securities
This exception does not apply.
(3) If any local body willfully fails to pay the stamp duty payable under this section, the stamp duty
An additional amount of ten percent duty is payable to the government. Moreover, so long as that neglect continues
Another ten percent amount has to be paid as penalty every month.
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Commentary
This section is designed to exempt local bodies from paying stamp duty on debentures, bonds and securities. We know that Gram Panchayats, Municipalities, Municipal Corporations etc. are considered as local bodies.
Section 8-A : No stamp duty levied on securities issued by depositories:
Notwithstanding anything contained in this Act, or any other law for the time being in force
(a) if the person who has deposited the same, issues securities to one or more depositories, that person shall pay stamp duty on the amount of the securities so issued. (an issuer, by the issue of securities to one or more depositories shall, in respect of such issue, be chargeable with duty on the total amount of security issued by it and such securities need not be stamped ).
(b) a depository under sub-section (3) of section 14 of the Depositories Act, 1996, may issue a certificate of security. Stamp duty shall be payable on a certificate of security issued under this clause in the same manner as stamp duty is payable on a duplicate certificate issued under this Act. (where an issuer issues certificate of security under sub-section (3) of Section 14 of the Depositories Act, 1996 (22 of 1996), on such certificate duty shall be payable as is payable on the issue of duplicate certificate under this Act) .
(c) No stamp duty shall be payable under this Act or any other law for the time being in force on the transfers referred to below.
(i) registered ownership rights in securities, from a person to a depository, or from a depository;
Cases of Transfer to Beneficiary (registered ownership of securities from a person
to a depository or from a depository to a beneficial owner).
(ii) No stamp duty shall be levied on transfer of beneficial ownership securities, dealt with by a depository.
(iii) If the beneficial ownership units held by the depositories are mutual fund units (including units issued by a unit trust of India organized under the Unit Trust of India Act, 1963), no stamp duty shall be levied on transfer of such units. (beneficial ownership of units, such units being units of a Mutual Fund including units of the Unit Trust of India established under sub-section (1) of Section 3 of the Unit Trust of India Act, 1963 (52 of 1963), dealt with by a depository, shall not be liable to duty under this Act
or any other law for the time being in force).
Explanation 1 : For the purposes of this section, the words gen facial owner, depository, issuer have the same meaning as those given under section (2), sub-section (1), clause (a), (e), (f) of the Depositories Act, 1996. The definition itself applies to this section.
Explanation 2 : For the purposes of this section, the term "securities" shall have the meaning given in clause (h) of section (2) of the Securities Contracts (Regulation) Act, 1996, and this section shall also apply. (This section was added by the Seed Act, 2000).
Commentary
Depository means a person who receives a deposit. For example, we pay our money for our security
We keep it in banks, trusts and companies. In that order the respective banks etc. as depositories
are considered. The respective depositories issue security certificates in respect of those deposits. Government securities,
Indian Stamp Act 1899 17
Shares, stock, bonds, debentures, debenture stock, etc. are all marketable securities. The heading of this section shows that no stamp duty is payable on such securities. But fully understanding the scope of this section is somewhat complicated. Only experienced auditors and chartered accountants can give full explanation on this section. The following judgment helps to give some understanding of the scope of this section. - Central Bank of India Vs. State of Kerala 2009(4) SCC 94.
Section 8-B : No stamp duty levied on corporatization, demutuation, and related documents:
Notwithstanding anything contained in this Act, or any other law for the time being in force
(a) recognized schemes of corporatisation or de-mutalisation, or both;
(b) documents relating to corporatisation, or demutualization, or both, of a recognized stock exchange pursuant to any scheme (which documents may relate to any property, business, assets (including immovable property), contracts, rights, liability or obligation).
If the documents relating to the scheme contracts are approved by the Securities and Exchange Board of India (under sub-section (2) of section 4-B of the Securities Contracts (Regulation) Act, 1956), no stamp duty shall be levied on such documents.
Explanation: In relation to this section
(a) The definition given under clauses (aa), (ab) and (ga) of section (2) of the Securities Contracts (Regulation) Act, 1956 in relation to the words 'corporatisation', 'demutualisation' and 'scheme' shall apply to this section.
(b) The definition given under section (3) of the Securities and Exchange Board of India, 1992 in relation to the term 'Securities and Exchange Board of India' shall apply to this section.
Commentary
'Corporatisation' means the replacement of one recognized stock exchange by another recognized stock exchange, 'Demutualisation' means the transfer of trading and commercial rights of members of a recognized stock exchange, their
Separation from ownership right. Both these terms are related to securities and stock exchanges.
Exemption from levy of stamp duty on documents related to corporatization and demutualization schemes
This section was added in 2005.
Section 8-C : No stamp duty levied on negotiable warehouse receipts:
Notwithstanding anything contained in this Act, no stamp duty shall be levied on Negotiable Warehouse Receipts.
Section 8-D : No stamp duty levied on assignment documents of receivables :
Notwithstanding anything to the contrary in this Act, or any other law for the time being in force, no stamp duty shall be levied on any document other than a written agreement assigning receivables to a 'factor'.
Commentary
The definition of the terms 'receivables' and 'factor' is found in clauses (p) and (i) of section (2) of the Factoring Regulation Act, 2011.
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Section 8-E: No stamp duty shall be levied on documents relating to conversion of a branch of a bank into a wholly-owned subsidiary bank :
Notwithstanding anything contained in this Act, or any other law for the time being in force,
(a) A branch of a bank may be converted into a wholly owned subsidiary bank of that bank in accordance with the directives or scheme of the Reserve Bank. Or the shareholding of a bank may be transferred to a holding company of that bank. No stamp duty is leviable either under this Act or under any other Act in respect of these two processes. (or)
(b) in pursuance of the orders or scheme of the Reserve Bank, in order to convert a branch of a bank into a wholly-owned subsidiary bank of that bank or in order that the shareholding of a bank is transferred to a holding company of that bank, the properties, business, assets (whether inheritance) belonging to that branch of the bank; , whether immovable), no stamp duty shall be levied on documents relating to contracts, rights, obligations, liabilities etc.
Explanation : (1) For the purposes of this section 'bank' means:
(a) 'banking company' as defined under section (5), clause (c) of the Banking Regulation Act, 1949;
(b) “corresponding (a corresponding new bank)” as defined under Clause (DA) of Section (5) of the Banking Regulation Act, 1949.
(c) 'State Bank of India', organized under section (3) of the State Bank of India Act, 1955,
(d) 'subsidiary bank' as defined under clause (k) of section (2) of the State Bank of India (Subsidiary Banks) Act, 1959;
(e) a Regional Rural Bank organized under section (3) of the Regional Rural Banks Act, 1976:
(f) 'co-operative bank' as defined under section (5), clause (CCI) of the Banking Regulation Act, 1949,
(g) "Multi-State Co-operative Bank" as defined under section (5), (CCIIA) of the Banking Regulation Act, 1949;
(ii) for the purposes of this section 'Reserve Bank of India' means the 'Reserve Bank of India' organized under section (3) of the Reserve Bank of India Act, 1934;
Commentary
Clauses 8-A, 8-B, 8-C, 8-D, 8-E deal with exemption from stamp duty. Apart from the documents covered by these sections, the Central and State Governments issue notifications from time to time exempting many other documents from the purview of this Act. This is noteworthy.
Section 8-F : No stamp duty levied on transfer or assignment of monetary capital assets :
This Act notwithstanding any other law for the time being in force, banks under section (5) of the Securitization, and Reconstruction of Assets and Enforcement of Security Interest Act, 2002, or
Capital assets belonging to financial institutions, to another asset reconstruction company (section (2), sub-section (1) of the same Act,
(defined under clause (ba)) No stamp duty shall be levied on documents written by way of remittance. (Seed
This section was added by Act, 2016. But it has not been implemented yet. readers may note).
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Section 9 : Powers relating to reduction and cancellation of stamp duty:
(1) The Government may, if it thinks fit for the public welfare, make regulations or orders as follows. (Such regulations or orders shall be published in the Official Gazette) :
(a) on certain types of documents applicable in whole, or in part to any part, of the territories under his administration. Or the stamp duty may be reduced on certain special documents, or on documents belonging to certain special categories, or on documents written by or on behalf of certain categories of persons. or may be repaid (reduce or remit). In that order the Government may issue orders as applicable to the past, or as applicable to the present. (and)
(2) Duties belonging to insurance policies can be consolidated. or composition and issues issued by similarly organized companies or other corporate bodies, or in the case of single transfer companies (whether incorporated or unincorporated), debentures, bonds, shares, or insurance policies, proxies, Stamp duties may also be consolidated in case of transfer of other marketable securities. Or it can be solved.
(3) In relation to this section 'Government' means
(a) Stamp duties payable on bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, transfer of shares, debentures, proxies, receipts, covered by entry No. 96 in the First List of the Seventh Schedule to the Constitution and other levied under this Act; Central Govt in respect of stamp duties. (Except the items mentioned in clause (b) of sub-section (1).
(b) matters other than those mentioned in the above clause, and in relation to matters in sub-section (1), clause (b), means the State Government.
Commentary
This section also deals with exemption from stamp duty, amalgamation of various types of stamp duty etc. but there is some specialty in this section. This Act is an Ordinance of the Central Government. Thus the State Governments have no power to grant exemption from stamp duties at will. In this regard, it should be specifically mentioned in this Act or the rules, or the Central Government should issue a special notification or order. Schedule-1 and Schedule-1-A have been explained earlier in that order. At the same time, it is necessary to keep in mind the Central List, State List and Collective List in the Seventh Schedule of the Constitution of India. The exemptions given under Sections 8, 8-A, 8-B, 8-C, 8-D, 8-D and 8-F as noted earlier are entirely within the purview of the Central Government. However, this section is different. Clause (b) in sub-section (1) and sub-section (2) Amended by the Government of Undivided Andhra. (as amended by the Andhra Pradesh (Amendment) Act, 2008), therefore the powers of the States of Andhra Pradesh and Telangana and in some cases the Central Government in certain cases in respect of exemptions from stamp duty covered by this section. Readers will notice. Regarding the scope of this section it is to be noted that exemption of stamp duty is possible only in cases where there is wider public interest
will be This is noteworthy. The following judgments will help to give some understanding of the scope of this section.
- (M.C. Mehata Vs. Union of India 2004 (6) SCC 588 = AIR 2004 SC 4618.
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