Introduction:
The Indian Stamp Act, 1899 deals with the tax payable in the
form of "Stamps"; on instruments of any real estate transaction,
as mentioned in schedule I of the Constitution. The basic purpose
of the Act is to raise revenue for the Government. The Act provides
provisions for payment of Stamp Duty to the local government
by purchasing a non- judicial stamp paper. The value of Stamp
Duty will depend upon the rental period, lease term and sale
value of the property in question.
Instruments:
Under the Act , every instrument is chargeable with stamp duty. The instruments include every document by which any right or liability is, or purports to be created, transferred , limited , extended, extinguished or recorded. The Act states that a Deed of Gift creates a right and makes necessary stamp duty payable on the instrument of Gift as given in Article 33 of Schedule I of the Act. The Stamp Duty on the exchange deed is payable under Entry 31 of Schedule I of the Indian Stamp Act,1899.
As per the Act, a sale deed is to be stamped as a Conveyance. An Exchange Deed also attracts the same duty as a conveyance for its consideration value. Conveyance has been defined in the Indian Stamp Act and includes a transaction of sale.
As per the provisions of the Indian Stamp Act, 1899, stamp duties have to be paid by way of labels affixed and impressed by the authorised officer in case of lower stamp duties and using embossed or engraved stamp paper in case of higher stamp duties.
As per the provisions of the Act, if any instrument is not
listed in schedule I then no Stamp Duty is payable. The payment
of Stamp Duty on every instrument affords an evidentiary
value to the document.
Who is empowered to make laws:
Both the Central and State Government can pass legislations relating to Stamp Duty, provide the legislation by State Government are not at loggerheads with those issued by the Central Government. Instruments on which Stamp Duty is payable are distributed amongst both the State and the Centre.
The Parliament is empowered to make law in respect of Stamp
Duty. It can prescribe rates of Stamp Duty but the Stamp
Duty rates prescribed by Parliament in Indian Stamp
Act, 1899 , for instance, on Agreements, Affidavit, Articles
of Association of a Company, Partnership Deed, Lease Deed, Mortgage,
Power of Attorney, Security Bond are valid only for Union territories.
In case of States, the rates prescribed by individual States
may prevail in those States.
With the State Governments having the power to make rules for composition or consolidation of duties in respect of debentures, bonds or other marketable securities, the State Government has decided to extend the said power of consolidation of duties. This will be applicable to shares or policies of insurance, proxies and other receipts also by suitably amending the provisions of the Indian Stamp Act.
Latest Development:
Since the process of printing,
supply and distribution of stamps not only involves expenditure
but also results in delay and non-availability of stamps and
ultimately to loss of revenue to the State. This amendment is
aimed at bringing in a flexible approach to stamp duty collection.
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