FAQs on Stamp Duty (India)

By | February 18, 2019
(Last Updated On: February 18, 2019)

FAQs on Stamp Duty

Q.

 What is Stamp Duty?

A.

It is type of Tax collected by the State Government.

Q.

 Why stamp duty is required to be paid?

A.

Stamp duty is a kind of Tax like Sales Tax or Income Tax. It must be paid in full and on time to the Government. In case of delay in payment of stamp duty, penalties are imposed

Q.

 What are the important Instruments under Indian Stamp Act, 1899?

A.

Important Instruments are agreements, conveyances, exchange, gift, Certificate of sale, deed of partition, Power of Attorney to sell immovable property when given for consideration, deed of settlement and transfer of lease by way of assignment, bill of exchange, bill of lading, debenture, letter of credit, policy of insurance, proxy, receipt and transfer of shares.

Q.

 Does Stamp Duty vary from Instrument to Instrument?

A.

 Yes

Q.

Whether Stamp Duty is computed on market value or consideration amount?

A.

Stamp Duty is computed on market value or consideration amount of the property, whichever is higher.

Q.

What is consideration amount?

A.

 Consideration amount is the total value of funds involved in any purchase/ sale transaction entered between two or more parties.

Q.

How many types of stamp duty are collected?

A.

Stamp Duty collected by the States can be broadly divided into two categories, viz., Stamp Duty paid under the Indian Stamp Act, 1899 and Stamps used in payment of fees under the Court-fees Act 1870.

Q.

What are the different types of stamps used as on date?

A.

Stamps used under the Indian Stamp Act, 1899 & The Bombay Stamp Supply And Sale Rules, 1934, can be broadly divided into

1. Impressed stamps, including a) Labels affixed and impressed by the proper officer; b) Stamps embossed or engraved on stamped paper c) Impression by franking machine d) Impression by any such machine as the State Government may, by notification in the Official Gazette, specify 
2. Adhesive stamps.

Q. Is Stamp Duty required to be paid on all documents regarding transfer of properties?
A. All transfer Instrument/document including agreement to sale, conveyance, gift mortgage, exchange, partition, power of attorney either general or special leave and license, agreement, tenancy agreement, lease deeds are required to be stamped before registration.
A will or original nomination in a Co-operative Housing Society is
not required to be stamped. However, when a nominee transfers a flat subsequently in the name of legal heirs then it is required to be stamped as per market value or the consideration amount,
whichever is higher.
Q.  What are the precautions to be taken at the time of purchase of stamp paper?
A. Stamp papers are to be purchased in the name of one of the
parties to the instrument/document. It must be purchased in the
name of one of the parties involved in the transaction
Q.  When Stamp Duty is to be paid?
A. It is to be paid either before execution of the document or on the
day of execution of the document.
Q.  Who is required to pay Stamp Duty?
A. Stamp Duty is either paid by a purchaser or transferee or as
mutually agreed in the agreement between the parties.
Q.  Who will do the stamp duty valuation ?
A. SHCIL (Stock Holding Corporation of India Limited  ) is appointed as Central Record-keeping Agency (CRA) and associated with stamp duty collection and not valuation. For valuation of Stamp duty you need to contact your Legal Advisor or Appointed Govt officials concerned for the same.

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