PROJECT ON

“Bombay Stamp Act.”

SUBMITTED TO - Prof. Mayuri Taware

SUBMITTED BY – Vivekanand Jha
ID NO. – 27
[LLB 2nd Year – 2022- 2023]

KLE COLLEGE OF LAW,

NAVI MUMBAI

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Contents

TITLE: -.............................................................................................................................................................. 3

ABSTRACT: - .................................................................................................................................................... 3

KEYWORDS: -................................................................................................................................................... 3

INTRODUCTION: - .......................................................................................................................................... 3

PURPOSE OF BOMBAY STAMP ACT:- ....................................................................................................... 4

LEGAL REQUIREMENTS OF THE BOMBAY STAMP ACT:- ................................................................. 4

DIFFERENT TYPES OF DOCUMENTS AND TRANSACTIONS COVERED:- ....................................... 5

CONSEQUENCES OF NON-PAYMENT OR UNDER-PAYMENT OF STAMP DUTY:-......................... 6

PROCEDURE FOR STAMPING AND REGISTERING DOCUMENTS: ................................................... 7

THE ROLE OF GOVERNMENT AUTHORITY IN ENFORCING THE ACT: ......................................... 8

CONCLUSION:- ................................................................................................................................................ 9

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TITLE: -

Bombay Stamp Act

ABSTRACT: -

The Bombay Stamp Act is a legal framework that regulates the payment of stamp duty on various
types of documents and transactions in the state of Maharashtra. The act provides for the collection
of stamp duty on instruments such as agreements, leases, conveyances, and mortgages.

This research provides an overview of the Bombay Stamp Act, including its purpose, scope, and
legal requirements. It examines the different types of documents and transactions covered by
the act, and the consequences of non-payment or under-payment of stamp duty.

The paper also discusses the procedures for stamping and registering documents and the role
of government authorities in enforcing the provisions of the act.

KEYWORDS: -

Stamp, Maharashtra, Government Authorities, Documents, Registration, Penalty, Legal

Requirements.

INTRODUCTION: -

The Bombay Stamp Act is a crucial legal framework in the state of Maharashtra that regulates the
collection of stamp duty on various types of documents and transactions. The act aims to ensure
that proper stamp duty is paid on instruments such as agreements, conveyances, and mortgages,
which are used in a wide range of commercial and personal transactions.
The act provides for the collection of stamp duty on various instruments, and the rates of stamp
duty payable vary based on the type of document and the transaction involved. Failure to comply
with the provisions of the act can result in penalties, fines, or legal disputes.
Understanding the Bombay Stamp Act is crucial for businesses and individuals involved in
various types of transactions in Maharashtra. Compliance with the legal requirements of the act
can help them avoid legal disputes and penalties and ensure that they are fulfilling their legal
obligations. Therefore, this paper aims to provide a comprehensive understanding of the Bombay
Stamp Act and its importance in commercial and personal transactions.

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PURPOSE OF BOMBAY STAMP ACT:-

The purpose of the Bombay Stamp Act is to regulate the collection of stamp duty on various types
of documents and transactions in the state of Maharashtra. The act aims to ensure that proper stamp
duty is paid on instruments such as agreements, conveyances, and mortgages, which are used in a
wide range of commercial and personal transactions.
The collection of stamp duty under the Bombay Stamp Act generates revenue for the government
and helps finance various public services and development projects. It also serves as a deterrent
against tax evasion and ensures that transactions are legally binding and enforceable.
The act provides a legal framework for the collection of stamp duty and outlines the procedures
for stamping and registering documents. It also prescribes the rates of stamp duty payable based
on the type of document and the transaction involved. The act also provides penalties for non-
payment or under-payment of stamp duty.

LEGAL REQUIREMENTS OF THE BOMBAY STAMP ACT1:-

The Bombay Stamp Act outlines several legal requirements that must be followed for the proper
collection of stamp duty on various types of instruments and transactions in the state of
Maharashtra. Some of the key legal requirements of the act are:

➢ Payment of Stamp Duty: The act mandates the payment of stamp duty on all instruments
and transactions specified under the act. The stamp duty must be paid before or at the time
of execution of the instrument, and the duty must be paid in the form of adhesive or
impressed stamps.
➢ Proper Stamping of Instruments: The act requires that all instruments subject to stamp
duty must be properly stamped with the correct denomination of stamps. The stamp must
be affixed or impressed in such a manner that it cannot be reused or transferred.
➢ Time Limit for Stamping: The act provides a time limit for the stamping of instruments.
The time limit is generally 30 days from the date of execution of the instrument.
However, for certain types of instruments, such as leases and agreements, the time limit
is 60 days.

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 ➢ Registration of Instruments: The act also provides for the registration of certain types
of instruments, such as conveyances and mortgages, with the appropriate authority. The
registration of instruments is required to make the instrument legally valid and
enforceable.
➢ Consequences of Non-Compliance: The act prescribes penalties for non-payment or
underpayment of stamp duty and for failure to comply with the provisions of the act. Non-
compliance can result in fines, penalties, and legal disputes.

DIFFERENT TYPES OF DOCUMENTS AND TRANSACTIONS COVERED2:-

The Bombay Stamp Act, of 1958 is legislation that regulates the payment of stamp duty on various
types of documents and transactions carried out in the state of Maharashtra. The following are
the different types of documents and transactions that are covered by the Bombay Stamp Act:

❖ Instruments of Conveyance: Any document that transfers or conveys the ownership or

title of any immovable property such as land, buildings, or flats, including gift deeds, sale
deeds, mortgage deeds, lease deeds, and exchange deeds.
❖ Security Transactions: Any document that creates, transfers, or extinguishes any right
or liability, such as a bond, debenture, mortgage deed, pledge, hypothecation, and
assignment.
❖ Share Transactions: Any document that relates to the transfer of shares or debentures of
any company, including share transfer deeds, debenture transfer deeds, and bond transfer
deeds.
❖ Instruments of Exchange: Any document that evidences the exchange of properties or
assets, including exchange deeds.
❖ Power of Attorney: Any document that empowers a person to act on behalf of another
person, including a general power of attorney and special power of attorney.
❖ Partnership Deed: Any document that records the terms and conditions of a partnership
between two or more individuals or entities.
❖ Loan Agreements: Any document that records the terms and conditions of a loan between
two or more individuals or entities.

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 ❖ Indemnity Bonds: Any document that indemnifies one party against any loss or damage
that may arise due to the actions of the other party.
❖ Lease Agreements: Any document that records the terms and conditions of a lease or
rental agreement for immovable property.
❖ Affidavits: Any document that contains a statement of facts made under oath or
affirmation.

CONSEQUENCES OF NON-PAYMENT OR UNDER-PAYMENT OF STAMP DUTY3:-

Non-payment or under-payment of stamp duty under the Bombay Stamp Act can have serious
consequences, which may include the following:

• Invalidity of Document: Documents submitted become invalid if there is Non-Payment

or Under-Payment of stamp duty. A document submitted under the Bombay Stamp Act is
considered invalid in a court of law, and cannot be used as evidence or admitted as proof
of any transaction or agreement.
• Penalty and Fine: The person who has executed the document or transaction is liable to
pay the stamp duty along with a penalty of 2% per month on the unpaid stamp duty for up
to 24 months, or until the stamp duty is paid in full, whichever is earlier. The penalty can
also be as high as 10 times the unpaid stamp duty.
• Prosecution: Under the Bombay Stamp Act, any person who violates the provisions of
the Act by failing to pay the required stamp duty can be prosecuted and punished with
imprisonment for up to six months, or with a fine up to ten times the amount of the
deficient stamp duty, or both.
• Interest: In addition to the penalty, interest at the rate of 6% per annum may also be
charged on the unpaid stamp duty.
• Delay in Registration: A document that is not properly stamped under the Bombay
Stamp Act may also cause a delay in registration, which can affect the legal rights and
interests of the parties involved in the transaction.

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PROCEDURE FOR STAMPING AND REGISTERING DOCUMENTS4:

The procedures for stamping and registering documents may vary depending on the type of
document and transaction involved, and it is advisable to consult a legal professional or the
relevant expert person or authorities for the correct procedure and compliance with the Bombay
Stamp Act.

The following are the procedures for stamping and registering documents under the Bombay
Stamp Act:

➢ Calculation of Stamp Duty: The first step in stamping a document is to determine the
correct amount of stamp duty payable based on the type of document and transaction
involved. This can be done by referring to the schedule of stamp duty rates under the
Bombay Stamp Act.
➢ Purchase of Stamp Paper: Once the stamp duty amount is calculated, the next step is to
purchase the requisite stamp paper from an authorized vendor. Stamp papers are available
in different denominations, and the denomination of the stamp paper should be equal to
or greater than the stamp duty payable.
➢ Execution of Document: The document should be executed on the purchased stamp
paper, and the details of the stamp paper, such as denomination and serial number, should
be mentioned on the document.
➢ Affixing the Stamp: The stamp paper should be affixed to the document in such a way
that it cannot be reused or transferred to another document. The stamp should also be
canceled by the person executing the document, by writing their name or initials across
the stamp.
➢ Presentation for Registration: Once the document is stamped, it should be presented for
registration at the relevant sub-registrar's office within four months from the date of
execution. The registration fee should be paid, and the document should be submitted
along with the necessary supporting documents.
➢ Verification and Registration: The sub-registrar will verify the document and
supporting documents, and if everything is in order, will register the document and

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 endorse the same with the date and time of registration. The registered document will be
returned to the person presenting the document for registration.

THE ROLE OF GOVERNMENT AUTHORITY IN ENFORCING THE ACT 5:

The Bombay Stamp Act is a state law that governs the taxation of various types of documents in
the state of Maharashtra. The primary role of the government authorities in enforcing this law is
to ensure that all eligible documents are properly stamped and that the required stamp duty is
paid. the role of government authorities in enforcing the Bombay Stamp Act is to ensure that all
eligible documents are properly stamped and that the required stamp duty is paid. They also have
a responsibility to prevent fraud, enforce penalties for non-payment of stamp duty, and take
appropriate legal action against offenders.
The following are the key responsibilities of the government authorities in enforcing the Bombay
Stamp Act:

❖ Stamp Duty Collection: The government authorities are responsible for collecting the
stamp duty on eligible documents. They ensure that the stamp duty is paid as per the
prescribed rates and that the appropriate stamp papers are used.
❖ Verification of Documents: The government authorities verify the authenticity of the
documents submitted for stamping. They check whether the document is legally valid and
enforceable and that the information provided in the document is accurate.
❖ Issuing Stamp Certificates: After the stamp duty is paid, the government authorities
issue a stamp certificate as proof of payment. The certificate is affixed to the document
and indicates that the document is legally valid.
❖ Prevention of Fraud: The government authorities are responsible for preventing fraud
and ensuring that the stamping process is not misused. They have the power to investigate
cases of suspected fraud and take appropriate legal action against offenders.
❖ Enforcement of Penalties: The government authorities are responsible for enforcing
penalties for non-payment or underpayment of stamp duty. They may also take legal
action against those who attempt to evade or avoid stamp duty.

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CONCLUSION:-

The Bombay Stamp Act is an important legislation that governs the payment of stamp duty on
various types of documents and transactions in the state of Maharashtra. The Act lays down the
rates of stamp duty payable, the procedures for stamping and registering documents, and the
consequences of non-payment or underpayment of stamp duty. It is important for individuals and
businesses to be aware of the provisions of the Act and to ensure compliance to avoid legal
consequences. Consulting a legal professional or the relevant authorities can be helpful in
understanding the Act's requirements and ensuring that all transactions and documents are duly
stamped and registered.
In my opinion, compliance with the legal requirements of the Bombay Stamp Act is crucial for
businesses and individuals involved in various types of transactions in Maharashtra. Failure to
comply with the provisions of the act can result in penalties, fines, or legal disputes. Therefore, it
is essential to understand and follow the legal requirements of the act for the proper collection of
stamp duty on instruments and transactions covered by the act.

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