IN D IA N

STA M P A CT

1899
PRESENTED BY :-
 Amreen Mirza (26).
 Komal Pival (29).
 Priyanka Punjabi (33).
 Kavita Savarkar (37).
 Natasha Sitlani (42).
 Sonali Lund (62).
 INTRODUCTION
The Indian Stamp Act,1899 is a fiscal enactment,on the
basis of which stamp duties are levied on the transactions
effected by certain instruments as mentioned in the Act.
The main object of the Act is to secure revenue for the
state by levying stamp duty on certain classes of
instruments as specified in the Act.
The Act extends to the whole of India except the
state of Jammu & Kashmir. It is a central enactment.
States are empowered to have their respective state
legislations for levying of stamp duty.
Article 266 of the Constitution of India read with
List II and List III of the seventh schedule defines
the field of legislations.
In matter of stamp duties, entry no.63 of List II
provides for instrument in respect of transactions
in the state list and entry 44 of List III provides
for power to legislate on stamp duties other than
duties or fee collected by means of judicial
stamps, but not including rates of stamps.
In states where separate enactment exists for levy
of Stamp Duty, Indian Stamp Act will not apply
unless there is an express or implied provision for
applicability of Indian Stamp Act.
SOME IMPORTANT TERMS
 JUDICIAL STAMPS.
Judicial stamps are surcharge with words “court
fees” and are used in courts in some offices
under the provisions of court fees act.

 NON-JUDICIAL STAMPS:
Non-judicial stamps are used for transactions
between persons where a written instrument is
used in a transaction.
 ADHESIVE STAMPS:
These stamps are printed on small pieces of
paper and affixed to the instruments.
 BONDS:
The definition of bond in section 2© is an
inclusive defination . A bond is one , which imports
an obligation in writing to pay the money or obliges
the scribe to deliver grain or other agricultural
produce to another. Bonds can be simple bond,
conditional bond, grain bond.
 CONVEYANCE:
Conveyance includes a conveyance on sale and
every instrument by which property, whether
movable or immovable, is transferred inter-vivos
and which is not otherwise specifically provided for
by schedule1.
 It implies that an instrument of transfer which is seperately
provided for under any of the articles in schedule1 will be
chargeable with duty provided for in the article and not with
the stamp duty prescribed for conveyance.

 CHARGEABLE:
The word chargeable means chargeable under the act in
force at the date of execution of the instrument.
 DOCUMENT:
Document is not defined in the act. As per the general
clauses act, “document includes any matter written,
expressed or described upon any substance by means of
letters , figures or marks, or by more than one of those means
,which is intended to be used, or which may be used, for the
purpose of recording that matter.”
 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 fixed or used in
accordance with the law for the time being in force in the state.
 INSTRUMENT:
Instrument includes any document by which any right or
liability is created or purports (implies) to be created , transferred
, limited, extended, extinguished or recorded.
 LEASE:
A lease of immovable property is a transfer of a right to
enjoy such property , made for a certain time, expressed or
implied, or in perpetuity, in consideration of a price paid or
promised or of money, a share of crops, service or any other
value, to be rendered peridically or on specified occasions to the
transferror by the transferree , who accepts on such terms.
 INSTRUMENTS
CHARGEABLE WITH STAMP
DUTY.
Section 3 states that the instruments mentioned in schedule 1 of the act
are chargeable with duty mentioned in the schedule subject to the
provisions of the act. It lays down the following general principles
upon which the duty is chargeable under the act.
Every instrument mentined in the schedule 1 which is not
previously executed by any person, is executed in india on or after
the first day of july, 1899.
Every promissory note is to be stamped with indian stamp, if it is
accepted or paid or presented or endorsed, transferred or
negotiated in india.
 INSTRUMENTS EXEMPTED
FROM STAMP DUTY:
(1) An instrument executed by , or on behalf of , or in
favour of, the government.

(2) sale, transfer or other disposition of ship or vessel

either absolutely or by way of mortgage or
otherwise.

Thus,section 3 is the charging section that

makes certain instruments liable to stamp duty. It is
not the transaction but only the instrument which is
chargeable to stamp duty.
SEVERAL INSTRUMENTS USED
IN SINGLE TRANSACTION OF
SALE, MORTGAGE OR
SETTLEMENT:
 In the case of any sale , mortgage or settlement , if several
instruments are employed for completing the transaction, the
principal instrument only shall be chargeable with the duty
prescribed in schedule 1 , for the conveyance, mortgage or
settlement.
 Each of the other instuments shall be chargeable
with a duty of one rupee instead of the duty (if
any ) prescribed for it in the schedule.

 The parties may determine themselves as to

which of the instrument so employed, shall be
deemed to be the principle instrument.
 SECURITIES NOT LIABLE TO
STAMP DUTY (SECTION 8A)
 Meaning of securities:

 Securities include:
(a) shares, scripts, stocks, bonds, debentures, debenture stock or
other marketable securities of a like nature in or of any
incorporated company or other body corporate.
(b) Government securities.
(c) such other instruments as may be declared by the central
government to be securities and
(d) Rights and interest in securities.
 Meaning of Issuer:
Issuer is the company issuing security. It shall maintain
register recording the registered owners of securities.

 Meaning of Participant:
Participant is an agent of the depository acting as bridge
between the depository and beneficial owner.

Section 8A states that notwithstanding anything contained

in this act:

 An issuer, by the issue of securities to one or more

depositories, shall be chargeable with duty on the total
amount of security issued by it and such securities need not
be stamped separately.
 Where an issuer issues certificate of security under
section 14 of the Depositories Act, 1996, duty shall
be payable on such certificate as is payable on the
issue of duplicate under this Act;
 Transfer of registered ownership of share from a
person to a depository or from a depository to a
beneficial owner shall not be liable to any stamp
duty;
Explanation: for the purposes of this
section,the expressions “beneficial owner”,
“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.
POWER TO REDUCE, REMIT OR
COMPOUND DUTIES – SECTION 9
Government may, by rule or order, reduce or remit, in the
whole or any part of the territories under its administration, the
duties with which any instruments are chargeable. Such order
may be made with prospective or retrospective effect.

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 of list I in schedule VII
to the Constitution, the “central Government”.
(b) In other cases, the expression government means “State
Government”.
 STAMPS AND MODES OF
USING THEM
Duties how to be paid-Section 10

All duties with which any instruments are chargeable shall be

paid, and such payment shall be indicated on such
instruments by means of stamps according to the provisions
or the prescribed rules.
The rules regulate the description of stamps, which may
used, number of stamps which may be used in case of
impressed stamps and size of paper on which the bill of
exchange and the promissory notes are to be written.
 Use of adverse stamps –Section
11
 The following instruments may be stamped with
adhesive stamps, namely
 Instruments chargeable with stamp duty not
exceeding ten naye paisa, except parts of bill of
exchange payable otherwise than on demand and
drawn in sets;
 Bills of exchange and promissory notes drawn in India;
 Entry as an advocate ,Vakil or attorney on the role of
high court;
 Notarial acts; and
 Transfers by endorsement of shares in any incorporate
company or other cooperate.
CANCELLATION OF ADHESIVE
STAMPS:
 Adhesive stamps must be cancelled in such a way
that they cannot be used again. If the instruments
are not cancelled in the sail manner, they are
deemed unstamped.
 Object of the clause is to protect revenue. Also, if
the stamps are not cancelled, instruments are
inadmissible as evidence.
 The person required to cancel an adhesive stamp may
do so by the writing on or across the stamp his name
or initials or the name or initials of the firm with the
true date of the so writing, or in any other effectual
manner.
 TIME OF STAMPING
INSTRUMENTS – SECTION
17.
 All instruments chargeable with duty and executed by any
person in India shall be stamped before or at the time of
execution.

 Every instrument chargeable with duty executed only out

of India and not being a bill of exchange or promissory
note,
 may be stamped within three months after it has been
first received in India.

 Where any such instrument cannot, with reference to

the description of stamp prescribe therefore, be duly
stamped by a private person, it may be taken within the
said period of three months to the collector.
 The Collector shall then stamp the same, in such
manner as the State Government may, by rule,
prescribe, with a stamp of such value as the person so
taking such instrument may require and pay for.
 In case of bill of exchange payable otherwise than on
demand or promissory note drawn or made out of India, the
first holder of such instrument , shall affix thereto the
proper stamp and cancel the same, before he presents such
instrument for acceptance or payment, or endorses, tranfers
or otherwise negotiates the same in India.

Section 20 – 28 provide for the manner of arriving

at the instrument’s value on which the rates mentioned in
the Schedule 1 apply.
 DUTIES PAYABLE BY WHOM-
SECTION 29
 In the absence of the agreement to the contrary, stamp
duty shall be borne:
 In respect to certain kinds of instruments described in
Schedule1 like Administration bond, Bills of exchanges,
Promissory notes, Mortgage Deed, Indemnity bond,
Agreement relating to deposit of title deed, pawn or
pledge, security bond, debenture etc.by the party executing
or making such instruments.
 In the case of policy of insurance other than fire-insurance-
by the person effecting the insurance.
 In case of policy of fire- insurance-by the person issuing the
policy.
 In the case of conveyance (including a reconveyance of
mortgaged property)-by the grantee.
 In the case of the lease or agreement to lease-by the
lessee or intended lessee.
 In the case of counterpart of lease-by the lassoer.
 In the case of instrument of exchange-by the parties in
equal shares.
 In the case of the instrument of partition-by the party
thereto in proportion to their respective shares in the
whole property partitioned
 If the partition in the execution of the order passed by
the revenue authority or civil court or arbitrator-by the
parties in such proportion as such authority, court or
arbitrator directs.
 In the case of the certificate of sale-by the purchaser of
the property to which such certificate relates.
 ADJUDICATION AS TO
PROPER STAMP:SECTION 31-
32
Adjudication of stamps means determining the
chargeability of stamp duty on instrument. Provisions
related to adjudication of stamps are as under:
(1)Application for adjudication is made to collector of
stamps appointed in each district / area.
(2)Such application can be made by the parties to the
instrument.
(3)Application for adjudication should be accompanied by
true copy or an abstract of the instrument , and with
such affidavit or other evidence , as may be necessary to
prove that all facts affecting the chargeability of the
instrument have been truly set forth in the instrument.
(4)Collector may refuse to proceed upon any such
application until such abstract and evidence has
been furnished accordingly.
(5)Evidence furnished for adjudication of stamp duty
cannot be used against any person in any civil
proceeding , except in an enquiry as to the duty
with which the instrument to which it relates is
chargeable and adjudication fee of minimum of 50
paise and maximum Rs. 50 is required to be paid.
(6) If the collector is of the opinion that the
instrument brought him for determination of duty is
already fully stamped , or duty already paid is
equal to the duty so determined, then he shall
certify by endorsement on such instrument that the
full duty (stating the amount) with which it is
chargeable has been paid.
 INSTRUMENTS NOT DULY
STAMPED-SECTION 33-48
(1) If any instrument appears to be not duly stamped , any officer
who is empowered by law or by consent of public authorities to
receive evidence , except the officer of police , has the power to
impound the same. The object of this section is to protect
revenue.
(2) In the case of a Judge of a High Court , the duty of examining
and impounding any instrument under this section may be
delegated to such officer as the court appoints in this behalf.
(3) The State Government may determine what offices shall be
deemed to be public offices and who shall be deemed to be
persons in charge of public offices.
(4) The officer who impounds the instrument shall
send an authenticated copy of such instrument ,
together with a certificate in writing , stating the
amount of duty and penalty levied in respect
thereof , and shall send such amount to the
collector or to such person as he may appoint in
this behalf.
(5) Instruments which are not duly stamped cannot
be admitted as evidence for any purpose subject
to exceptions provided in section 35.
(6) The State Government may make rules providing
that , where an instrument bears a stamp of
sufficient amount but of improper description , it
may , on payment of the duty with which the
same is chargeable be certified to be duly
stamped from the date of its execution.
(7) The collector , if he thinks fit , has the power to
refund any portion of the penalty in excess of
Rupees five.
(8) Collector is empowered to stamp the impounded
instruments.
(9) If the collector is of the opinion that instrument
impounded is chargeable with duty and is not duly
stamped , he is empowered to ask the payment of
the proper duty or the amount required to make
up the same , together with a penalty. The amount
of penalty can be
(a) five rupees ; or
(b) ten times the amount of the proper duty or of
the deficient portion thereof, whether such amount
exceeds or falls short of five rupees.
BIBLIOGRAPHY
 Yahoo.com.
 Google.com.
 Business Law Textbook – Suman Kalani.
VOTE OF THANKS.