LexThe INDIAN STAMP ACT, 1899
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THE INDIAN STAMP ACT, 1899
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ARRANGEMENT OF SECTIONS
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CHAPTER I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.
CHAPTER II
STAMP DUTIES
A.—Of the liability of instruments to duty
3. Instruments chargeable with duty.
3A. [Repealed.]
4. Several instruments used in single transaction of sale, mortgage or settlement.
5. Instruments relating to several distinct matters.
6. Instruments coming within several descriptions in Schedule I.
7. Policies of sea-insurance.
8. Bonds, debentures or other securities issued on loans under Act XI of 1879.
8A. Securities dealt in depository not liable to stamp duty.
8B. Corporatisation and demutualisat ion schemes and related instruments not liable to duty.
8C. Negotiable warehouse receipts not liable to stamp duty.
8D. Agreement or document for assignment of receivables not liable to stamp duty.
8E. Conversion of a branch of any bank into a wholly owned subsidiary of bank or transfer of
shareholding of a bank to a holding company of bank not liable to duty.
8F. Agreement or document for transfer or assignment of rights or interest in financial assets not
liable to stamp duty.
9. Power to reduce, remit or compound duties.
B.—Of stamps and the mode of using them
10. Duties how to be paid.
11. Use of adhesive stamps.
12. Cancellation of adhesive stamps.
13. Instruments stamped with impressed stamps how to be written.
14. Only one instrument to be on same stamps.
15. Instrument written contrary to section 13 or 14 deemed unstamped.
16. Denoting duty.
C. —Of the time of stamping instruments
17. Instrument executed in India.
18. Instruments other than bills and notes executed out of India.
19. Bills and notes drawn out of India.
D. —Of valuations for duty
20. Conversion of amount expressed in foreign currencies.
21. Stock and marketable securities how to be valued.
22. Effect of statement of rate of exchange or average price.
23. Instruments reserving interest.
23A. Certain instruments connected with mortgages of marketable securities to be chargeable as
agreements.
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SECTIONS
24. How transfer in consideration of debt, or subject to future payment, etc., to be charged.
25. Valuation in case of annuity, etc.
26. Stamp where value of subject-matter is indeterminate.
27. Facts affecting duty to be set forth in instrument.
28. Direction as to duty in case of certain conveyances.
E. —Duty by whom payabl e
29. Duties by whom payable.
30. Obligation to give receipt in certain cases.
CHAPTER III
ADJUDICATION AS TO STAMPS
31. Adjudication as to proper stamp.
32. Certificate by Collector.
CHAPTER IV
INSTRUMENTS NOT DULY STAMPED
33. Examination and impounding of instruments.
34. Special provision as to unstamped receipts.
35. Instruments not duly stamped inadmissible in evidence, etc.
36. Admission of instrument where not to be questioned.
37. Admission of improperly stamped instruments.
38. Instruments impounded how dealt with.
39. Collector's power to refund penalty paid under section 38, sub -section (1).
40. Collector's power to stamp instruments impounded.
41. Instruments unduly stamped by accident.
42. Endorsement of instruments on which duty has been paid under sections 35, 40 or 41.
43. Prosecution for offence against Stamp -law.
44. Persons paying duty or penalty may recover same in certain cases.
45. Power to Revenue -authority to refund penalty or excess duty in certain cases.
46. Non-liability for loss of instruments sent under section 38.
47. Power of payer to stamp bills, and promissory notes received by him unstamped.
48. Recovery of duties and penalties.
CHAPTER V
ALLOWANCES FOR STAMPS IN CERTAIN CASES
49. Allowance for spoiled stamps.
50. Application for relief under section 49 when to be made.
51. Allowance in case of printed forms no longer required by Corporations.
52. Allowance for misused stamps.
53. Allowance for spoiled or misused stamps how to be made.
54. Allowance for stamps not required for use.
54A. Allowances for stamps in denominations of annas.
54B. Allowances for Refugee Relief stamps.
55. Allowance on renewal of certain debentures.
CHAPTER VI
REFERENCE AND REVISION
56. Control of, and statement of case to, Chief Controlling Revenue-authority.
3
SECTIONS
57. Statement of case by Chief Controlling Revenue -authority to High Court.
58. Power of High Court to call for further particulars as to case stated.
59. Procedure in disposing of case stated.
60. Statement of case by other Courts to High Court.
61. Revision of certain decisions of Courts regarding the sufficiency of stamps.
CHAPTER VII
CRIMINAL OFFENCES AND PROCEDURE
62. Penalty for executing, etc., instrument not duly stamped.
63. Penalty for fa ilure to cancel adhesive stamp.
64. Penalty for omission to comply with provisions of section 27.
65. Penalty for refusal to give receipt, and for devices to evade duty on receipts.
66. Penalty for not making out policy or making one not duly stamped.
67. Penalty for not drawing full number of bills or marine policies purporting to be in sets.
68. Penalty for post -dating bills, and for other devices to defraud the revenue.
69. Penalty for breach of rule relating to sale of stamps and for unauthorised sale.
70. Institution and conduct of prosecutions.
71. Jurisdiction of Magistrates.
72. Place of trial.
CHAPTER VIII
SUPPLEMENTAL PROVISIONS
73. Books, etc., to be open to inspection.
74. Powers to make rules relating to sale of stamps.
75. Powers to make rules generally to carry out Act.
76. Publication of rules.
76A. Delegation of certain powers.
77. Saving as to court-fees.
77A. Saving as to certain stamps.
78. Act to be translated, and sold cheaply.
79. [Repealed.]
SCHEDULE I.––Stamp-duty on instruments.
SCHEDULE II. –– [Repealed.]
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THE INDIAN STAMP ACT, 1899
ACT NO. 2 OF 18991
[27th January, 1899]
An Act to Consolidate and amend the law relating to Stamps.
WHEREAS it is expedient to consolidate and amend the law relating to Stamps. It is hereby enacted as
follows:—
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement — (1) This Act may be called the Indian Stamp Act,
1899.
2[(2) It extends to the whole of India except the State of Jammu and Kashmir:
Provided that it shall not apply to 3[the territories which, immediately before the 1st November, 1956,
were comprised in Part B States] (excluding the State of Jammu and Kashmir) except to the extent to
which the provisions of this Act relate to rates of stamp -duty in respect of the documents specified in
Entry 91 of List I in the Seventh Schedule to the Constitution].
(3) It shall come into force on the first day of July, 1899.
2. Definitions. — In this Act, unless there is something repugnant in the subject or context, —
(1) ―Banker‖. —―banker‖ includes a bank and any person acting as a banker;
(2) ―Bill of exchange ”. — ―bill of exchange‖ means a bill of exchange as defined by the Negotiable
Instruments Act, 1881, (26 of 188 1), and includes also a hundi, and any other document entitling or
purporting to entitle any person, whether named therein or not, to payment by any other person of, or to
draw upon any other person for, any sum of money;
(3) ―Bill of exchange payable on demand‖. —―bill of exchange payable on demand‖ includes—
1. For Report of the Select Committee, see Gazette of India, 1898. Pt. -V, p. 231: and for Proceedings in Council,
see 1898, Pt. VI, pp. 10 and 278; and Gazette of India, 1899, Pt. VI, p 5.
This Act has been partially extended to Berar Laws Act, 1941 (4 of 1941) and has been declared to be in force
in the Sonthal Parganas by the Sonthal Parganas Settlement Regulation (3 of 1872), s. 3, as amended by Reg. 3 of
1899, s. 3; in the Angul District by the Angul Laws Regulation, 1936 (5 of 1936), s. 3 and Sch; and in Panth Piploda
by the Panth Piploda Laws Regulation, 1929 (1 of 1929), s. 2.
Under s. 3(a) of the Scheduled Districts Act, 1874 (14 of 1874) the Act has been declared to be in force
in the Scheduled Districts of Ganjam, Vizagapatam and East Godavary, see Notification No. 121, dated 25th
April, 1 927, Fort St. George Gazette, 1927, Pt. I, p. 684. It has also been extended under ss. 5 and 5A of the
same Act, with certain modifications. to the districts of the Khasi and Jaintia Hills, the Garo Hills, the
Lusha i Hills and the Naga Hills and the North Kachar sub -division of the Kachar district, the Mikir Hill
Tracts in the Sibsagar and Nowgong districts and the Lakhimpur Frontier Tra ct, see Notification No. 1541. -
F(a), dated 10th April; 1930. Assam Gazette 1930. Pt. ii, p. 700.
Extended to Dadra and Nagar Haveli by Reg. 6 of 1963, s. 2 and Sch. 1: to Goa, Daman and Diu by Reg. 11 of
1963, s. 3 and to Laccadive, Minicoy and Amindivi Islands by Reg. 8 of 1965, s. 3 and Sch edule.
2. Subs. by Act 43 of 1955, s. 3, for sub-section (2) (w.e.f. 1-4-1956).
3. Subs. by the A.O. (No. 2) 1956, for ―Part B States‖.
5
(a) an order for the payment of any sum of money by a bill of exchange or promissory note, or for
the delivery of any bill of exchange or promissory note in satisfaction of any sum of money, or for the
payment of any sum of money out of any particular fund which may or may not be available, or upon
any condition or contingency which may or may not be performed or happen;
(b) an order for the payment of any sum of money weekly, monthly, or at any other stated period;
and
(c) a letter of credit, that is to say, any instrument by which one person authori zes another to give
credit to the person in whose favour it is drawn:
(4) “Bill of lading”. — ―bill of lading‖ includes a ―through bill lading‖, but does not include a mate's
receipt:
(5) “Bond”. — ―bond‖ includes—
(a) any instrument whereby a person obliges himself to pay money to another, on condition that
the obligation shall be void if a specified act is performed, or is not performed, as the case may be;
(b) any instrument attested by a witness and not payable to order or bearer, whereby a person
obliges himself to pay money to another; and
(c) any instrument so attested, whereby a person obliges himself to deliver grain or other
agricultural produce to another:
(6) “Chargeable”. — ―chargeable‖ means, as applied to an instrument executed or first executed
after the commencement of this Act, chargeable under this Act, and, as applied to any other instrument,
chargeable under the law in force in 1[India] when such instrument was executed or, where several
persons executed the instrument at different times, first executed:
(7) “Cheque”. — ―cheque‖ means a bill of exchange drawn on a specified banker and not expressed
to be payable otherwise than on demand:
2* * * * * *
(9) “Collector” . — ―Collector‖ —
(a) means, within the limits of the towns of Calcutta, Madras and Bombay, the Collector of
Calcutta, Madras and Bombay, respectively, and, without those limits, the Collector of a district, and
(b) includes a Deputy Commissioner and any officer whom 3[the 4[State Government]] may, by
notification in the Official Gazette, appoint in this behalf:
(10) ―Conveyance”. — ―conveyance‖ includes a conveyance on sale every instrument by which
property, whether moveable or immovable, is transferred inter vivos and which is not otherwise
specifically provided for by schedule I:
(11) ―Duly stamped ”. — ―duly stamped ‖, as applied to an instrument, means that the instrument
bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been
affixed or used in accordance with the law for the time being in force in 1[India]:
(12) ―Executed” and “execution”. — ―executed‖ and ―execution‖ used with reference to
instruments, mean ―signed‖ and ―signature‖:
1. Subs. by Act 43 of 1955, s. 2, for ―the States‖ (w.e.f. 1-4-1956).
2. Clause (8) omitted by the A.O. 1937.
3. Subs. by the A.O. 1937, for ―the L.G.‖.
4. Subs. by the A.O. 1950, for ―collecting Government‖.
6
1* * * * * *
(13) ―Impressed stamp”. — ―impressed stamp‖ includes—
(a) labels affixed and impressed by the proper officer, and
(b) stamps embossed or engraved on stamped paper:
2[(13A) ―India”. — ―India‖ means the territory of India excluding the State of Jammu and Kashmir:]
(14) ―Instrument”.— ―instrument‖ includes every document by which any right or liability is, or
purports to be, created, transferred, limited, extended, extinguished or recorded:
(15) ―Instrument of partition ”.— ―instrument of partition ‖ means any instrument whe re by co -
owners of any property divide or agree to divide such property in severalty, and includes also a final order
for effecting a partition passed by any Revenue-authority or any Civil Court and an award by an arbitrator
directing a partition:
(16) ―Lease”. — ―lease‖ means a lease of immovable property, and includes also—
(a) a patta;
(b) a kabuliyat or other undertaking in writing, not being a counterpart of a lease, to cultivate,
occupy, or pay or deliver rent for, immovable property;
(c) any instrument by which tolls of any description are let;
(d) any writing on an application for a lease intended to signify that the application is granted;
3[(16A) ―Marketable security”. — ―marketable security‖ means a security of such a description as
to be capable of being sold in any stock market in 4[India] or in the United Kingdom:]
(17) ―Mortgage-deed”. — ―mortgage-deed‖ includes every instrument whereby, for the purpose of
securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the
performance of an engagement, one person transfers, or creates, to, or in favour of, another, a right o ver
or in respect of specified property:
(18) ―Paper”. — ―paper‖ includes vellum, parchment or any other material on whi ch an instrument
may be written:
(19) ―Policy of insurance”. — ―policy of insurance‖ includes—
(a) any instrument by which one person, in consideration of a premium, engages to indemnify
another against loss, damage or liability arising from an unknown or contingent event;
(b) a life -policy, and any policy insuring any person against accident or sickness, and any other
personal insurance; 5***
6* * * * *
2[(19A) ―Policy of group insurance ”. — ―policy of group insurance ‖ means any instrument
covering not less than fifty or such smaller number as the Central Government may
approve, either generally or with reference to any particular case, by which an insurer, in consideration
of a premium paid by an employer or by an employer and his employees jointly, engages to
cover, with or without medical examin ation and for the sole benefit of persons other
than the employer, the lives of all the employees or of any class of them, determined
1. Clause (12A) omitted by the A.O. 1950. Earlier ins. by the A.O. 1937.
2. Ins. by Act 43 of 1955, s. 4 (w.e.f. 1-4-1956).
3. Ins. by Act 15 of 1904, s. 2.
4. Subs. by Act 43 of 1955, s. 2, for ―the States‖ (w.e.f. 1-4-1956).
5. The word ―and‖ omitted by Act 5 of 1906, s. 2.
6. Clause (c) omitted by s. 2, ibid.
7
by conditions pertaining to the employment, for amounts of insurance based upon a plan which precludes
individual selection :]
(20) ―Policy of sea-insurance‖ or ―sea-policy‖. — ―Policy of sea-insurance‖ or ―sea-policy‖—
(a) means any insurance made upon any ship or vessel (whether for marine or inland navigation),
or upon the machinery, tackle or furniture of any ship or vessel, or upon any goods, merchandise or
property of any description whatever on board of any ship or vessel, or up on the freight of, or any
other interest which may be lawfully insured in, or relating to, any ship or vessel, and
(b) includes any insurance of goods, merchandise or property for any transit which includes, not
only a sea risk within the meaning of clause (a), but also any other risk incidental to the transit
insured from the commencement of the transit to the ultimate destination covered by the insurance:
Where any person, in consideration of any sum of money paid or to be paid for additional freight
or otherwise, agrees to take upon himself any risk attending goods, merchandise or property of any
description whatever while on board of any ship or vessel, or engages to indemnify the owner of any
such goods, merchandise or property from any risk, loss or da mage, such agreement or engagement
shall be deemed to be a contract for sea-insurance:
(21) ―Power-of-attorney”.— ―power-of-attorney‖ includes any instrument (not chargeable with a fee
under the law relating to C ourt-fees for the time being in force) empowering a specified person to act for
and in the name of the person executing it:
(22) ―Promissory note”.— ―promissory note‖ means a promissory note as defined by the Negotiable
Instruments Act, 1881 (XXVI of 1881):
It also includes a note promising the payment of any sum of money out of any particular fund which
may or may not be available, or upon any condition or contingency which may or may not be performed
or happen:
(23) ―Receipt”. — ―receipt‖ includes any note, memorandum or writing—
(a) whereby any money, or any bill of exchange , cheque or promissory note is acknowledged to
have been received, or
(b) whereby any other moveable property is acknowledged to have been received in satisfaction
of a debt, or
(c) where by any debt or demand, or any part of debt or demand, is acknowledged to have been
satisfied or discharged, or
(d) which signifies or imports any such acknowledgment,
and whether the same is or is not signed with the name of any person; 1***
(24) ―Settlement”. — ―settlement‖ means any non-testamentary disposition, in writing, of moveable
or immovable property made—
(a) in consideration of marriage,
(b) for the purpose of distributing property of the settler among his family or those for whom he
desires to provide, or for the purpose of providing for some person dependent on him, or
(c) for any religious or charitable purpose:
1. The word ―and‖ omitted by Act 18 of 1928, s. 2 and the First Sch.
8
and includes an agreement in writing to make such a disposition 1[and, where any such disposition
has not been made in writing, any instrument recording, whether by way of declaration trust or otherwise,
the terms of any such disposition]; 2***
3[(25) ―Soldier”. — ―soldier‖ includes any person below the rank of non -commissioned officer who
is enrolled under the 4Indian Army Act, 1911 (8 of 1911).]
5[(26) ―Stamp”. — ―stamp‖ means any mark, seal or endorsement by any agency or person duly
authorised by the State Government, and includes an adhesive or impressed stamp, for the purposes of
duty chargeable under this Act.]
CHAPTER II
STAMP DUTIES
A.—Of the liability of instruments to duty
3. Instruments chargeable with duty . —Subject to the provisions of this Act and the exemptions
contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated
in that Schedule as the proper duty therefore respectively, that is to say—
(a) every instrument mentioned in that Schedule which, not having been previously executed by
any person, is executed in 6[India] on or after the first day of July, 1899;
(b) every bill of exchange 7[payable otherwise than on demand] 8*** or promissory note drawn
or made out of 6[India] on or after that day and accepted or paid, or presented for acceptance or
payment, or endorsed, transferred or otherwise negotiated, in 6[India]; and
(c) every instrument (other than a bill of exchange , 8***or promissory note) mentioned in that
Schedule, which, not having been previously executed by any person, is executed out of 6[India] on or
after that day, relates to any property situate, or to any matter or thing done or to be do ne, in
6[India] and is received in 6[India]:
Provided that no duty shall be chargeable in respect of—
(1) any instrument executed by, or on behalf of, or in favour of, the Government in cases where,
but for this exemption, the Government would be liable to pay the duty chargeable in respect of such
instrument;
(2) any instrument for the sale, transfer or other disposition, either absolutely or by way of
mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship
or vessel registered under the Merchant Shipping Act 1894, Act No. 57 & 58 Vict. c. 60 or under
Act XIX of 1838 Act No. or the Indian Registration of Ships Act, 1841, (CX of 1841) as amended by
subsequent Acts.
3A. [Instruments chargeable with additional duty.] Omitted by the Refugee Relief Taxes (Abolition)
Act, 1973 (13 of 1973), s. 2 (w.e.f. 1-4-1973).
4. Several instruments used in single transaction of sale , mortgage or settlement. — (1) Where,
in the case of an y sale, mortgage or settlement, several instruments are employed for completing the
transaction, the principal instrument only shall be chargeable with the duty prescribed in Schedule I, for
the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty
of one rupee instead of the duty (if any) prescribed for it in that Schedule.
1. Ins. by Act 15 of 1904, s. 2.
2. The word ―and‖ omitted by the A.O. 1950. Earlier ins. by Act 18 of 1928, s. 2 and the First Sch.
3. Added by Act 1928 of 18, s. 2 and the First Sch.,
4. See. Now the Army Act 1950 (46 of 1950).
5. Ins. by Act 23 of 2004, s. 117.
6. Subs. by Act 43 of 1955, s. 2, for ―the States‖ (w.e.f. 1-4-1956).
7. Ins. by Act 5 of 1927, s. 5.
8. The word ―cheque‖ omitted by s. 5, ibid.
9
(2) The parties may determine for themselves which of the instrument so employed shall, for the
purposes of sub-section (1), be deemed to be the principal instrument:
Provided that the duty chargeable on the instrument so determined shall be the highest duty which
would be chargeable in respect of any of the said instruments employed.
5. Instruments relating to several distinct matters . — Any instrument comprising or relating to
several distinct matters shall be chargeable with the aggregate amount of the duties with which separate
instruments, each comprising or relating to one of such matters, would be chargeable under this Act.
6. Instruments coming within several descriptions in Schedule I. — Subject to the provisions of
the last preceding section, an instrument so framed as to come within two or more of the descriptions in
Schedule I, shall, where the duties chargeable thereunder are dif ferent, be chargeable only with the
highest of such duties:
Provided that nothing in this Act contained shall render chargeable with duty exceeding one rupee a
counterpart or duplicate of any instrument chargeable with duty and in respect of which the prop er duty
has been paid.
7. Policies of sea-insurance. —1 * * * * *
(4) Where any sea-insurance is made for or upon a voyage and also for time, or to extend to or cover
any time beyond thirty days after the ship shall have arrived at her destination and been there moored at
anchor, the policy shall be charged with duty as a policy for or upon a voyage, and also with duty as a
policy for time.
8. Bonds, debentures or other securities issued on loans under Act XI of 1879. —
(1) Notwithstanding anything in this Act, any local authority raising a loan under the provisions of the
Local Authorities Loan Act, 1879 (XI of 1879) or, of any other law for the time being in force, by the
issue of bonds, debentures or other securities , shall, in respect of such loan, be chargeable with a duty of
2[one per centum] on the total amount of the bonds, debentures or other securities issued by it, and such
bonds, debentures or other securities need not be stamped and shall not be chargeable with any further
duty on renewal, consolidation, sub-division or otherwise.
(2) The provisions of sub -section ( 1) exempting certain bonds, debentures or other securities from
being stamped and from being chargeable with certain further duty shall apply to the bonds, debentures or
other securities of all outstanding loans of the kind mentioned therein, and all such bonds, debentures or
other securities shall be valid, whether the same are stamped or not:
Provided that nothing herein contained shall exempt the local authority which has issued such bonds,
debentures or other securities from the duty chargeable in respect thereof prior to the twenty -sixth day of
March, 1 897, when such duty has not already been paid or remitted by order issued by the Central
Government.
(3) In the case of willful neglect to pay the duty required by th is section, the local authority shall be
liable to forfeit to the Government a sum equal to ten per centum upon the amount of duty payable, and a
like penalty for every month after the first month during which the neglect continues.
1. Sub-sections (1), (2) and (3) rep. by Act 11 of 1963, s. 92 (w.e.f. 1-8-1963).
2. Subs. by Act 6 of 1910, s. 2 for ―eight annas per centum‖.
10
1[8A. Securities dealt in depository not liable to stamp duty . — Notwithstanding anything
contained in this Act or any other law for the time being in force, —
(a) an issuer, by the issue of securities to one or more depositories, shall, in respect of such issu e,
be chargeable with duty on the total amount of security issued by it and such securities need not be
stamped;
(b) where an issuer issues certificate of security under sub -section ( 3) of section 14 of the
Depositories Act, 1996 (22 of 1996), on such cert ificate duty shall be payable as is payable on the
issue of duplicate certificate under this Act;
(c) the transfer of—
(i) registered ownership of securities from a person to a depository or from a depository to a
beneficial owner;
(ii) beneficial ownership of securities, dealt with by a depository;
(iii) 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 expressions ―beneficial ownership ‖,
―depository‖ and ―issuer‖ shall have the meanings respectively assigned to them in clauses (a), (e) and (f)
of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996).
Explanation 2.—For the purposes of this section, the expression ―securities‖ shall have the meani ng
assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). ]
2 [8B. Corporatisation and demutualisation schemes and related instruments not liable to
duty. —Notwithstanding anything contained in this Act or any other law for the time being in force, —
(a) a scheme for corporatisation or demutualisation, or both of a recognised stock exchange; or
(b) any instrument, including an instrument of, or relating to, transfer of any property, business,
asset whether movable or immovable, contract, right, liability and obligation, for the purpose of, or in
connection with, the corporatisation or demutualisation, or both of a recognised stock exchange
pursuant to a scheme,
as approved by the Securities and Excha nge Board of India under sub -section (2) of section 4B of the
Securities Contracts (Regulation) Act, 1956 (42 of 1956), shall not be liable to duty under this Act or any
other law for the time being in force.
Explanation. —For the purposes of this section, —
(a) the expressions ―corporatisation‖, ―demutualisation‖ and ―scheme‖ shall have the meanings
respectively assigned to them in clauses ( aa), (ab) and ( ga) of section 2 of the Securities Contracts
(Regulation) Act, 1956 (42 of 1956);
(b) ―Securities and Exchange Board of India‖ means the Securities and Exchange Board of India
established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).]
3 [8C. Negotiable warehouse receipts not liable to stamp duty .— Notwithstanding anyt hing
contained in this Act, negotiable warehouse receipts shall not be liable to stamp duty.]
4[8D. Agreement or document for assignment of receivables not liable to stamp duty. —
Notwithstanding anything contained in this Act or any other law for the time being in force, any
agreement or other document for assignment of ―receivables‖ as defined in clause ( p) of section 2 of the
Factoring Regulation Act, 2011 in favour of any ―factor‖ as defined in clause ( i) of section 2 of the said
Act shall not be liable to duty under this Act or any other law for the time being in force.]
1. Subs. by Act 10 of 2000, s. 118 (w.e.f. 12-5-2000). Earlier ins. by Act 22 of 1996, s. 30 and The Schedule (w.e.f. 20-9-1995).
2. Ins. by Act 18 of 2005, s.114 (w.e.f. 13-5-2005).
3. Ins by Act 37 of 2007, s. 55 (w.e.f. 25-10-2010).
4. Ins. by Act 12 of 2012, s. 35 and the Schedule (w.e.f. 1-2-2012).
11
1[8E. Conversion of a branch of any bank into a wholly owned subsidiary of bank or transfer of
shareholding of a bank to a holding company of bank not liable to duty. — Notwithstanding anything
contained in this Act or any other law for the time being in force, —
(a) conversion of a branch of a bank into a wholly owned subsidiary of the bank or transfer of
shareholding of a bank to a holding company of the bank in terms of the scheme or guidelines of the
Reserve Bank of India shall not be liable to duty under t his Act or any other law for the time being in
force; or
(b) any instrument, including an instrument of, or relating to, transfer of any property, business,
asset whether movable or immovable, contract, right, liability and obligation, for the purpose of, or in
connection with, the conversion of a branch of a bank into a wholly owned subsidiary of the bank or
transfer of shareholding of a bank to a holding company of the bank in terms of the scheme or
guidelines issued by the Reserve Bank of India in this behalf, shall not be liable to duty under this Act
or any other law for the time being in force.
Explanation. —
(i) For the purposes of this section, the expression ―bank‖ means—
(a) ―a banking company‖ as defined in clause (c) of section 5 of the Banking Regulation Act,
1949 (10 of 1949);
(b) ―a corresponding new bank ‖ as defined in clause ( da) of section 5 of the Banking
Regulation Act, 1949 (10 of 1949);
(c) ―State Bank of India‖ constituted under section 3 of the State Bank of India Act, 1955 (23
of 1955);
(d) ―a subsidiary bank ‖ as defined in clause ( A) of section 2 of the State Bank of India
(Subsidiary Banks) Act, 1959 (38 of 1959);
(e) ―a Regional Rural Bank ‖ established under section 3 of the Regional Rural Banks Act,
1976 (21 of 1976);
(f) ―a Co-operative Bank‖ as defined in clause ( cci) of section 5 of the Banking Regulation
Act, 1949 (10 of 1949);
(g) ―a multi-State co-operative bank‖ as defined in clause (cciiia) of section 5 of the Banking
Regulation Act, 1949 (10 of 1949);
(ii) For the purposes of this section, the expression the ―Reserve Bank of India ‖ means the
Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of
1934).]
2[8F. Agreement or document for transfer or assignment of rights or interest in financial assets
not liable to stamp duty.— Notwithstanding anything contained in this Act or any other law for the time
being in force, any agreement or other document for transfer or assignment of rights or interest in
financial assets of banks or financial institutions under section 5 of the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002, in favour of any asset reconstruction
company, as defined in clause ( ba) of sub -section (1) of section 2 of that Act, shall not be liable to duty
under this Act.]
9. Power to reduce, remit or compound duties . — 3[(1)] 4[The 5***Government] may, by rule or
order published in the Official Gazette, —
(a) reduce or remit, whether prospectively or retrospectively, in the whole or any part of 6[the
territories under its administration], the duties with which any instruments or any particular class of
instruments, or any of the instruments belonging to such class, or any instruments when executed by
or in favour of any particular class of persons, or by or in favour of any members of such class, are
chargeable, and
1. Ins. by Act 4 of 2013, s. 17 and the Schedule (w.e.f. 17-1-2013).
2. Ins. by Act 44 of 2016, s. 43 and the First Schedule (w.e.f. 1-9-2016).
3. S. 9 re-numbered as sub-section (1) of that section by the A.O. 1950.
4. Subs. by the A.O. 1937, for ―the G.G. in C‖.
5. The word ―collecting‖ omitted by the A.O. 1950.
6. Subs. by the A.O. 1937, for ―British India‖.
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(b) provide for t he composition or consolidation of duties 1[of policies of insurance and] in the
case of issues by any incorporated company or other body corporate 2[or of transfers (where there is a
single transferee, whether incorporated or not)] of debentures, bond or other marketable securities.
3[(2) In this section the expression ―the Government‖ means, —
(a) in relation to stamp -duty in respect of bills of exchange, cheques, promissory notes, bills of
lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts, and
in relation to any other stamp -duty chargeable under this Act and falling within entry 96 in List I in
the 4[Seventh Schedule to the Constitution , expect the subject matter s referred to in clause ( b) of
sub-section (1)]; the Central Government;
(b) Save as aforesaid, the State Government.]
B. —Of Stamps and the mode of using them
10. Duties how to be paid. — (1) Except as otherwise expressly provided in this Act, all duties with
which any instruments are chargeable shall be paid, and such payment shall be indicated on such
instruments, by means of stamps —
(a) according to the provisions herein contained; or
(b) when no such provision is applicable thereto-as the 5[State Government] may be rule direct.
(2) The rules made under sub-section (1) may, among other matters, regulate, —
(a) in the case of each kind of instrument-the description of stamps which may be used;
(b) in the case of instruments stamped with impressed stamps -the number of stamps which may
be used;
(c) in the case of bills of exchange or promissory notes 6*** the size of the paper on which they
are written.
11. Use of adhesive stamps . — The following instruments may be stamped with adhesive stamps,
namely: —
(a) instruments chargeable 7[with a duty not exceeding ten naye paise], except parts of bills of
exchange payable otherwise than on demand and drawn in sets;
(b) bills of exchange, 8*** and promissory notes drawn or made out of 9[India];
(c) entry as an advocate, vakil or attorney on the roll of a High Court;
(d) notarial acts; and
(e) transfers by endorsement of shares in any incorporated company or other body corporate.
12. Cancellation of adhesive stamps — (1) (a) Whoever affixes any adhesive stamp to any
instrument chargeable with duty which has been executed by any person shall, when affixing such stamp,
cancel the same so that it cannot be used again; and
(b) whoever executes any instrument on any paper bearing an adhesive stamp shall, at the time of
execution, unless such stamp has been already cancelled in manner aforesaid, cancel the same so that it
cannot be used again.
(2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used
again, shall, so far as such stamp is concerned, be deemed to be unstamped.
(3)The person required by sub-section (1) to cancel an adhesive stamp may cancel it by writing on or
across the stamp his name or initials or the name or initials of his firm with the true date of his so writing ,
or in any other effectual manner.
1. Ins. by Act 23 of 2004, s. 117.
2. Ins. by Act 32 of 1994, s. 99 (w.e.f. 13-9-1994).
3. Added by the A.O. 1950.
4. Subs by Act 21 of 2006 s. 69, for ―Seventh Schedule to the Constitution‖. (w.e.f. 18 -4-2006)
5. Subs. by the A.O. 1950, for ―collecting Government‖.
6. The words ―written in any oriental language‖ omitted by Act 43 of 1955 s. 5 (w.e.f. 1-4-1956).
7. Subs. by Act 19 of 1958, s. 2, for ―with the duty of one anna or half an anna‖ (w.e.f. 1 -10-1958).
8. The word ―cheques‖ omitted by Act 5 of 1927, s. 5.
9. Subs. by Act 43 of 1955, s. 2, for ―the States‖ (w.e.f. 1-4-1956).
13
13. Instruments stamped with impressed stamps how to be written . — Every instrument written
upon paper stamped with an impressed stamp shall be written in such manner that the stamp may appear
on the face of the instrument and cannot be used for or applied to any other instrument.
14. Only one instrument to be on same stamp . —No second instrument chargeable with duty shall
be written upon a piece of stamped paper upon which an instrument chargeable with duty has already
been written:
Provided that n othing in this section shall prevent any endorsement which is duly stamped or is not
chargeable with duty being made upon any instrument for the purpose of transferring any right created or
evidenced thereby, or of acknowledging the receipt of any money or goods the payment or delivery of
which is secured thereby.
15. Instrument written contrary to section 13 or 14 deemed unstamped .—Every instrument
written in contravention of section 13 or section 14 shall be deemed to be unstamped.
16. Denoting duty. —Where the duty with which an instrument is chargeable, or its exemption from
duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of
such last-mentioned duty shall, if application is made in writing to the Col lector for that purpose, and on
production of both the instruments, be denoted upon such first -mentioned instrument by endorsement
under the hand of the Collector or in such other manner (if any) as the 1[State Government] may by rule
prescribe.
C.— Of the time of stamping instruments
17. Instruments executed in India . — All instruments chargeable with duty and executed by any
person in 2[India] shall be stamped before or at the time of execution.
18. Instruments other than bills and notes executed out of India .—(1) Every instrument
chargeable with duty executed only out of 2[India], and not being a bill of exchange 3*** or promissory
note, may be stamped within three months after it has been first received in 2[India].
(2) Where any such instrument cannot, with reference to the description of stamp prescribed
therefore, be duly stamped by a private person, it may be taken within the said period of three months to
the Collector, who shall stamp the sam e, in such manner as the 1[State Government] may by rule
prescribe, with a stamp of such value as the person so taking such instrument may require and pay for.
19. Bills and notes drawn out of India .—The first holder in 2[India] of any bill of
exchange 4[payable otherwise than on demand], 3*** or promissory note drawn or made out of 2[India]
shall, before he presents the same for acceptance or payment, or endorses, transfers or otherwise
negotiates the same in 2[India], affix thereto the proper stamp and cancel the same:
Provided that,—
(a) if, at the time any such bill of exchange , 3*** or note comes into the hands of any holder
thereof in 2[India], the proper adhesive stamp is affixed thereto and cancelled in manner prescribed by
section 12 and such holder has no reason to believe that such stamp was affixed or cancelled
otherwise than by the person and at the time required by this Act, such stamp shall, so far as relates to
such holder, be deemed to have been duly affixed and cancelled;
(b) nothing c ontained in this proviso shall relieve any person from any penalty incurred by him
for omitting to affix or cancel a stamp.
1. Subs. by the A.O. 1950, for ―collecting Government‖.
2. Subs. by Act 43 of 1955, s. 2, for ―the States‖ (w.e.f. 1-4-1956).
3. The word ―cheque‖ omitted by Act 5 of 1927, s. 5.
4. Ins. by s. 5, ibid.
14
D.—Of valuations for duty
20. Conversion of amount expressed in foreign currencies .—(1) Where an instrument is
chargeable with ad valorem duty in respect of any money expressed in any currency other than that of
1[India] such duty shall be calculated on the value of such money in the currency of 1[India] according to
the current rate of exchange on the day of the date of the instrument.
(2) The Central Government may, from time to time, by notification in the Official Gazette, prescribe
a rate of exchange for the conversion of British or any foreign currency into the currency of 1[India] for
the purposes of calculating stamp -duty, and such rate shall be deemed to be the current rate for the
purposes of sub-section (1).
21. Stock and marketable securities how to be valued . —Where an instrument is chargeable with
ad valorem duty in respect of any stock or of any marketable or oth er security, such duty shall be
calculated on the value of such stock or security according to the average price or the value thereof on the
day of the date of the instrument.
22. Effect of statement of rate of exchange or average price . —Where an instrume nt contains a
statement of current rate of exchange, or average price, as the case may require, and is stamped in
accordance with such statement, it shall , so far as regards the subject -matter of such statement, be
presumed, until the contrary is proved, to be duly stamped.
23. Instruments reserving interest . —Where interest is expressly made payable by the terms of an
instrument, such instrument shall not be chargeable with duty higher than that with which it would have
been chargeable had not mention of interest been made therein.
2[23A. Certain instruments connected with mortgages of marketable securities to be chargeable
as agreements. — (1) Where an instrument (not being a promissory note or bill of exchange) —
(a) is given upon the occasion of the dep osit of any marketable security by way of security for
money advanced or to be advanced by way of loan, or for an existing or future debt, or
(b) makes redeemable or qualifies a duly stamped transfer, intended as a security, of any
marketable security,
it shall be chargeable with duty as if it were an agreement or memorandum of an agreement chargeable
with duty under 3[Article No. 5 (c)] of Schedule I.
(2) A release or discharge of any such instrument shall only be chargeable with the like duty. ]
24. How transfer in consideration of debt, or subject to future payment, etc. , to be charged. —
Where any property is transferred to any person in consideration, wholly or in part, of any debt due to
him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether
being or constituting a charge or incumbrance upon the property or not, such debt, money or stock is to be
deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is
chargeable with ad valorem duty:
Provided that, nothing in this section shall apply to any such certificate of sale as is mentioned in
Article No. 18 of Schedule I.
Explanation. — In the case of a sale of property subject to a mortgage or other incumbrance, an y
unpaid mortgage money or money charged, together with the interest (if any) due on the same, shall be
deemed to be part of the consideration for the sale:
Provided that where property subject to a mortgage is transferred to the Excerpt shown. Open the full act in Lexace.