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Sections 5–8F of the Indian Stamp Act


Sections 5–8F of the Indian Stamp Act

Section 5 – Instruments relating to several distinct matters

➤ Where a single instrument deals with multiple distinct matters
⇒ It shall be charged with aggregate stamp duty of all such matters

➤ In effect
⇒ Treated as separate instruments merged into one

Section 6 – Instruments falling under multiple descriptions

➤ If an instrument falls under two or more categories in Schedule I
⇒ Chargeable with only the highest duty

➤ Proviso:
⇒ Duplicate / counterpart instruments
→ Maximum duty = ₹1 (if original is duly stamped)

Section 7 – Policies of Sea Insurance

➤ Where policy covers:
→ Voyage + Time (beyond 30 days after arrival)

⇒ Duty payable as:
→ Policy for voyage

  • Policy for time

➤ Result
⇒ Dual stamp duty in such composite cases

Section 8 – Bonds, Debentures & Securities (Local Authority Loans)

➤ Loan raised by local authority through securities
⇒ Duty = 1% of total value

➤ Key Features:
→ No requirement of individual stamping
→ No further duty on:
• Renewal
• Consolidation
• Sub-division
→ Applicable to existing loans as well

➤ Penalty:
⇒ Non-payment leads to
→ 10% penalty + additional monthly penalty

Section 8A – Securities in Depository System

➤ Duty is levied only at the time of issue

⇒ No duty on transfer involving:
→ Investor ↔ Depository
→ Depository ↔ Beneficial owner
→ Mutual fund units in depository

➤ Certificates issued
⇒ Duty same as duplicate certificate

Section 8B – Corporatisation & Demutualisation

➤ No stamp duty on:
→ SEBI-approved schemes

⇒ Includes instruments relating to:
→ Transfer of property
→ Assets
→ Rights & liabilities

➤ Covers
⇒ Complete restructuring of stock exchanges

Section 8C – Negotiable Warehouse Receipts

➤ Status
⇒ Fully exempt from stamp duty

Section 8D – Assignment of Receivables

➤ No stamp duty on:
→ Agreements for assignment of receivables

➤ Condition
⇒ Assignment must be in favour of a
→ Factor (Factoring Regulation Act, 2011)

Section 8E – Banking Restructuring

➤ No duty on:
→ Conversion of branch → wholly owned subsidiary
→ Transfer of shareholding to holding company

⇒ Also includes transfer of:
→ Assets
→ Liabilities
→ Rights

➤ Condition
⇒ Must be as per RBI guidelines/schemes

Section 8F – Financial Assets (SARFAESI Act)

➤ No duty on:
→ Transfer / assignment of financial assets

➤ Applies when transfer is to:
→ Asset Reconstruction Company (ARC)

➤ Governed by
⇒ SARFAESI Act, 2002

 Quick Revision Table

SectionCore Principle
S.5Aggregate duty for multiple matters
S.6Highest duty applies
S.7Dual duty (voyage + time)
S.81% duty on local authority securities
S.8ANo duty on depository transfers
S.8BExemption for stock exchange restructuring
S.8CWarehouse receipts exempt
S.8DReceivables assignment exempt
S.8EBanking restructuring exempt
S.8FFinancial asset transfer exempt


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