Stamp Duty Act [Section 9 - 30]

🔹 Section 9 – Power to reduce, remit or compound duties

• Government may reduce/remit stamp duty:

  • Prospectively or retrospectively.

  • For whole/part of territory.

  • For specific instruments or classes.

  • For instruments executed by certain persons/classes.

• May provide for composition/consolidation of duties:

  • Insurance policies.

  • Securities (debentures, bonds, etc.).

• Meaning of “Government”:

  • Central Govt. → for Union List matters (Entry 96, List I).

  • State Govt. → for other stamp duties.

🔹 Section 10 – Duties how to be paid

• Duty payable via stamps:

  • As per Act provisions.

  • Or as prescribed by State rules.

• Rules may regulate:

  • Type of stamp.

  • Number of stamps.

  • Size of paper (for bills/notes).

🔹 Section 11 – Use of adhesive stamps

Permitted for:

• Low-value instruments.

• Bills/notes executed outside India.

• Enrollment of advocates.

• Notarial acts.

• Transfer of shares.

🔹 Section 12 – Cancellation of adhesive stamps

• Must be cancelled at time of affixing/execution.

• If not cancelled → treated as unstamped.

• Cancellation methods:

  • Signature/initials + date.

  • Any effective manner.

🔹 Sections 13–15 – Writing on stamped paper

• S.13: Stamp must appear on face and not reusable.

• S.14: Only one instrument per stamp paper.

• S.15: Violation → instrument deemed unstamped.

🔹 Section 16 – Denoting duty

• If duty depends on another instrument:

  • Collector may endorse payment on application.

🔹 Sections 17–19 – Time of stamping

• S.17: Instruments in India → before/at execution.

• S.18: Instruments executed outside India:

  • Stamp within 3 months of receipt in India.

• S.19: Bills/notes drawn outside India:

  • First holder must affix & cancel stamp before use.

🔹 Sections 20–22 – Valuation rules

• S.20: Foreign currency → convert at current exchange rate.

• Govt. may prescribe exchange rates.

• S.21: Securities → valued at average price on date.

• S.22: Statement of rate/price → presumed correct unless disproved.

🔹 Section 23 – Interest clause

• Mention of interest does NOT increase duty.

🔹 Section 23A – Securities as agreements

• Certain instruments relating to marketable securities:

  • Charged as agreements.

• Release → same duty.

🔹 Section 24 – Transfer with debt/encumbrance

• Debt or liability forms part of consideration.

• Includes:

  • Existing debt.

  • Mortgage + interest.

• Key rule: Duty on total consideration (actual + deemed).

📌 Illustrations:

• Debt release + price → both included.

• Sale subject to mortgage → mortgage amount included.

• Mortgagee purchase → deduction allowed.

🔹 Section 25 – Annuity valuation

• Definite period → total sum.

• Perpetual/indefinite → 20 years’ value.

• Life-based → 12 years’ value.

🔹 Section 26 – Indeterminate value

• If value uncertain:

  • Claim limited to amount covered by stamp used.

• Exception:

  • Mining leases → estimated royalty.

• Collector certification → treated as correct duty.

🔹 Section 27 – Facts affecting duty

• Instrument must disclose:

  • Full consideration.

  • All relevant facts.

• Non-disclosure → penalty implications.

🔹 Section 28 – Conveyance in parts

• Key rules:

  • Property sold in parts → duty on apportioned consideration.

  • Joint purchasers → duty per share.

  • Sub-sale:

    • Duty on sub-sale consideration.

    • Residue → balance duty.

• Minimum duty for residue: ₹1.

🔹 Section 29 – Duties by whom payable

(In absence of agreement)

• Executor/drawer → bonds, debentures, promissory notes, etc.

• Insurance:

  • General → insured.

  • Fire → insurer.

• Conveyance → grantee.

• Lease → lessee.

• Exchange → both equally.

• Sale certificate → purchaser.

• Partition → parties proportionately.

=🔹 Section 30 – Receipt obligation

• Receipt must be given when:

  • Payment > ₹20.

  • Includes money, cheque, note, or movable property.

• Must be duly stamped.

• Applies also to insurance premium receipts.