Maharashtra Stamp Act

I. APPLICABILITY

The Maharashtra Stamp Act,1958 applies to the entire State of Maharashtra. Only the instruments specified in the Schedule I to the Act are covered by this Act. All other instruments are either chargeable under the Indian Stamp Act (e.g., transfer of shares) or are not chargeable at all (i.e., if they are not specified under the Act as well as under the Indian Stamp Act).

II. CHARGE OF STAMP DUTY

2.1 It is very important to note that stamp duty is on an instrument and not on a transaction.

2.2 S. 3 of the Act levies stamp duty at the rate provided in Schedule I on any instrument executed in the State. Even instruments executed outside the state are liable to duty only on their receipt in the State, provided it relates to a property situated in the State or a matter or thing to be done in the State.

2.3 An instrument covering or relating to several distinct matters is chargeable with the aggregate amount of duty with which each separate instrument would have been chargeable.

2.4 In case an instrument is so drafted that it is covered within the ambit of more than one Article under Schedule I, then it shall be taxed by that Article which levies the highest amount of stamp duty.

2.5 The term “Instrument” has been defined to include every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished or recorded.

However, it does not include a bill of exchange, cheque, promissory note, bill of lading, letter of credit, policy of insurance, transfer of share, debenture, proxy and receipt. Some instruments narrated are governed by Indian Stamp Act, 1999.

III. CERTAIN DEFINITIONS

3.1 “Conveyance” has been defined to include:

A conveyance on sale,
Every instrument,
Every decree or final order of any Civil Court,
Every order made by the High Court u/s. 394 of the Companies Act, 1956 in respect of amalgamation of companies; by which property, whether movable or immovable or any estate or interest in any property is transferred to, or vested in any other person inter vivos and which is not otherwise specifically provided for by Schedule I.

The Explanation to the definition provides that any instrument by which one co-owner transfers his property to another co-owner would be deemed to be a conveyance provided that it is not an instrument of partition.

3.2 “Instrument of gift” has been defined to include, in case of an oral gift any instrument recording its making or acceptance, whether by way of declaration or otherwise.

3.3 “Instrument of partition” means any instrument whereby co-owners of any property divide or agree to divide such property and includes:

Any final order for effecting a partition passed by any revenue authority or any civil court,
An award by an arbitration directing a partition, and
When any partition is effected without executing any such instrument, any instrument or instruments signed by the co-owners and recording, whether by way of declaration of such partition or otherwise, the terms of such partition amongst the co-owners.

The expression 'co-owners' includes all kinds of co-ownership such as joint tenancy, tenancy in common, coparcenary, membership of HUF, etc. and the partnership.

3.4 “Immovable Property” includes land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth. The two leading decisions on this definition are those of the Supreme Court in the case of
Sirpur Paper Mills (1998) 1 SCC 400 and the case of Duncan’s Industries (2000) 1 SCC 633.

IV. PAYMENT OF STAMP DUTY

4.1 S.17 of the Act provides that all instruments chargeable with duty and executed in Maharashtra should be stamped before or at the time of execution or immediately thereafter or on the next working day following the date of execution.

4.2 Instrument executed only out of Maharashtra may be stamped within three months after it is first received in State.

4.3 Duty can be paid by way of adhesive or impressed stamps on the instruments. Adhesive Stamps affixed should be cancelled at the time of execution so that they are not available for reuse. Now franking of stamp duty is not permitted.

4.4 Further, S.14 prohibits writing of a second instrument chargeable with duty on a stamp paper on which an instrument chargeable with duty has already been written.

4.5 The stamp papers must be in the name of one of the parties to the transaction. They cannot be in the name of the relative, Chartered Accountant or Lawyer of the parties.

4.6 The date of issue of the stamp paper must not be more than 6 months older than the date of the transaction.

4.7 Who bears and pays the stamp duty is a matter of agreement between the parties. In the absence of any such agreement, the Act provides that in the case of a Conveyance, duty is to be paid by a buyer and by the lessee in case of a lease. In cases of Bonds, Release, Settlement, it is to be paid by the person making or drawing the instrument. In case of exchange, it is to be paid by the parties in equal shares and in case of partition, by the parties in proportion to their respective shares. In all other cases, it is to be paid by the person executing the instrument.

4.8 Stamp duty is payable at rates mentioned in Schedule I. Depending upon the Instrument, it may be based upon the Market Value, Area, or various other criteria. In case of instruments which are based upon Market Value of the property, the term in relation to any property which is the subject matter of an instrument, means the price which such property would have fetched if sold in open market on date of execution of such instrument or consideration stated in the instrument whichever is higher.

The stamp office determines the market value of the property by referring to an Annual Statement of Rates (commonly known as Stamp Duty Ready Reckoner) which gave the Market Values of various immovable properties in Mumbai. The Reckoner divides the immovable property into various categories such as developed land, undeveloped land, residential units, industrial units/office, shops, etc., and fixes their market value accordingly.

4.9 Any person can apply to the Collector of Stamps for adjudication of the stamp duty payable on the instrument who shall determine the duty, if any with which the instrument shall be chargeable. It may be noted that now adjudication is compulsory in all cases where an instrument requires registration as the Registrar of Sub-Assurances insists upon the same. The instrument should be brought to the Collector within 1 month of execution of such instrument in the State and within 3 months from date of receipt of such instrument in the State. When registrar of sub-registrar assurance determine proper value, there is no need for adjudication.

V. UNDERSTAMPED DOCUMENT

5.1 Under S. 34 of the Act, any instrument which is inadequately /not stamped, then it shall be inadmissible in evidence for any purpose, e.g., in a Civil Court. Such instruments can be admissible in evidence on payment of the requisite amount of duty and a penalty @ 2% per month on the deficient amount of duty calculated from the date of execution. However, the maximum penalty cannot exceed four times the amount of duty involved.

5.2 Further, any public officer can impound such improperly stamped instruments if it comes to his notice. Such impounded instruments must be sent to the Collector who would then determine the amount of duty and penalty, if any, payable on the same. Any party to an instrument can also suo motu submit an instrument for adjudication by the Collector u/s. 31.

There is separate set of procedure for a jurisdiction.

5.3 A person can be punished with rigorous imprisonment for up to 6 months (not less than 1 month) and with fine up to ₹ 5,000, if it is proved that the instrument was undervalued or short payment of duty was made with intention to evade duty.

SCHEDULE I RATES (IMPORTANT ARTICLES)

MAHARASHTRA

Article	Description of Instrument	Stamp Duty
4	Affidavit (Exemption: for use in the Court or Tribunal), as a condition of enrolments under the air force act 1950 or navy Act 1957	₹ 100
5	Agreement
(c) (e) (g-a)(i) (g-a)(ii)	Relating to purchase/sale of shares & securities Relating to purchase or sale of bullion/species Development Rights Agreement Relating to purchase of units in any scheme by an investor from a developer – when the investor sells the unit a set-off of the duty paid would be allowed against duty on Conveyance under Article 25	0.005% of the value of security 0.005% of the value of gold / silver Same as in the case of a Conveyance as on the market value Same as in the case of a Conveyance as on the market value
(g-d)	Relating to transfer of tenancy rights in:
	For non-residential use of any size; or For residential use with an area more than 300 sq. feet	5% of the market value of the property depending upon the location of the property
	For residential use with an area up to 300 sq. feet	₹ 200 per sq. meter
(g-e)	Relating to hire purchase	Same duty as on a Lease (Article 36)
(h) (i)	Relating to certain advertising contracts	0.25% if the amount agreed is up to ₹ 10 lakhs and 0.5% if the amount exceeds ₹ 10 lakhs NIL
(ii)	Relating to contracts for exclusive broadcasting / exhibition rights of a film
(iii)	Relating to specific performance by a person where contract > ₹ 100,000
(iv)	a) Amount does not exceed ₹ 100,000 b) In other cases	0.25% minimum ₹ 100 0.5% of the amount exceeds
(v)	Relating to assignment of Copyrights	0.25% of amount agreed up to ₹ 10 lakh other case 0.2% of amount agreed
(vi)	Relating to creation of any obligation, right or interest and having monetary value	0.10% if the amount agrees is up to ₹ 10 lakhs and 0.20% if the amount exceeds ₹ 10 lakhs
	General (not otherwise provided for)	₹ 100
6	Agreement for Deposit of Title Deeds, Pawn, Pledge or Hypothecation Deposit of title deeds securing amount of loan or for pawn, pledge or hypothecation securing amount of loan	₹ 1 for every ₹ 1,000 (approx. 0.1%) or part thereof of the amount secured by the deed if the amount secured is up to ₹ 5,00,000 and ₹ 2 for every ₹ 1,000 (approx 0.2%) in all other cases. The maximum duty is ₹ 10 lakhs
10	Articles of Association of a Company On the share capital, thereof subject to a nominal capital or increased share capital (Exemption S. 25 companies)	0.2% subject to a maximum of ₹ 50,00,000
12	Award by an Arbitrator or Umpire (not being an Award directing a Partition)	₹ 500
15	Cancellation (Exemption: Revocation of will)	₹ 500
17	Certificate or Other Document (Shares, Scrip, Stock, etc. on face value and premium)	₹ 1 for every ₹ 1,000 or part thereof (approx. 0.1%)
24	Composition Deed	₹ 500
25(a)	Conveyance (on the true market value) Movable Property	₹ 15 for every ₹ 500 or part thereof (approx. 3%)
(b) (A)	Immovable Property	Duty on every ₹ 500 of Market Value
(b) (A)	Within the Municipal limits of any urban area	5% of market value of property
	Within the limits of any Municipal Council / Panchayat /Cantonment of any area within MMRDA	4% of market value of property
	Within the limits of any Gram Panchayat	3% of market value of property
(c)	High Court order u/s. 394 of the Companies Act, in respect of amalgamation or reconstruction of companies	10% of market value of shares allotted in exchange and consideration if any paid but not exceeding the higher of : i) 5% of market value of the immovable property located in Maharashtra or the transferor company or ii) 0.7% of market value of shares allotted in exchange and consideration if any paid whichever is higher.
Special Points for Conveyance: 1An agreement for sale providing for transfer of possession shall be deemed to be a 'Conveyance' and will be stamped accordingly. However, a set off of the duty paid will be given at the time of execution of the conveyance in favour of owner/society. Assignment of copyrights is exempt from stamp duty. In case of amalgamation / reconstruction of companies, the market value of the shares of transferee company is the value of shares on stock exchange on the "appointed day" mentioned in the scheme or else the date of the court’s order. If the shares are not listed or not quoted, the market value means the value of shares to the transferor company or the value as determined by the Collector.
26	Copy of exchange	₹ 10
27	Counterpart/Duplicate	Maximum ₹ 100
28	Customs / Excise Bond in respect of duties payable/pursuant to Order of any Excise/Customs Officer	₹ 500
30	Divorce	₹ 100
32	Exchange	Same duty as on a conveyance but on the market value of that property which has the greater value
34	Gift (other than a settlement, will or transfer)	Same duty as on conveyance. In case of a gift to spouse, brother, sister, lineal ascendants or descendants @ ₹ 10 for every ₹ 500 or part thereof (approx. 2%) of market value
	Gift of residential/agricultural property to spouse, children or grand-children or wife of deceased son	₹ 200
35	Indemnity Bond	₹ 500
36	Lease including sub-lease: a) Where lease period is Up to 5 years 5 years to 10 years with a renewal clause 10 years to 29 years with a renewal clause Exceeding 29 years or for indefinite period or for perpetuity	Same Duty as on conveyance on the following values: 10% of market value 25% of market value 50% of market value 90% of market value
	Special Points for Lease: 1. Consideration such as premium, security deposit, advance, will for market value be treated as consideration passed on. If renewal period is specifically mentioned, will be treated as part of current lease. 2. An agreement for lease will not be treated as lease if there is no immediate demise – Atur India P Ltd., (1994) 2 SCC 497
36A	LEAVE & LICENCE
	For a term not exceeding 60 months with or without a renewal clause	0.25% of the total sum of followings: • Licence fees/Rent • Non-refundable deposit or premium; plus • Interest @ 10% p.a. on the refundable security deposit or money advanced/to be advanced
37	Letter of Allotment of Shares	Re. 1
39	Memorandum of Association of a company (Exemption u/s. 25 companies) a) if accompanied with Articles of Association b) if not so accompanied	₹ 1,00 Same duty as on Articles of Association under Article 10 ₹ 1,000 2% subject to maximum of ₹ 50,00,000
40	Mortgage Deed
a)	Where possession is given	Same duty as on conveyance on the amount secured by the deed
b)	Where possession is not given	₹ 5 for every ₹ 1,000 or part thereof (approx. 0.5%); subject to a Maximum of ₹ 10,00,000 and a Minimum of ₹ 100
42	Notary (attestation, etc., by Notary Public)	₹ 25
46	Partition Special Points : 1. The value of largest share remaining after the partition will be excluded for duty on equal share than duty is any one of share 2. In case of order of partition by a Civil Court rebate will be given to the extent of the Court Fees paid 3. ₹ 100 in case of agricultural land	₹ 10 for every ₹ 500 or part thereof (approx. 2%) of the market value of the separated share or shares of property.
47	Partnership including an LLP, Joint Venture to run a business, earn profits and to share profits, whether in cash or in kind
(a)	No contribution or cash contribution < ₹ 50,000	₹ 500
(b)	Cash Contribution > ₹ 50,000	1% subject to a maximum of ₹ 15,000
(c)	Contribution by way of property (not cash)	Same as on a conveyance on the market value of property
(d)	Dissolution or Retirement i) Where any property is transferred to a partner other than the one who brought it ii) In any other case	Same as on a conveyance on the market value subject to a minimum of ₹ 100 ₹ 500 (w.e.f. 24-4-2015)
48	Power of Attorney For sole purpose of registration For suits in small causes court For acting in a single transaction to one or more person [other than stated in 48(4)] For acting in more than one transaction or generally to one person For acting in one or more transactions or generally to one or more persons (i) For or without consideration and authorising to sell an immovable property (ii) For authorising to sell immovable property without consideration and given to parents, siblings, spouse, children, grand children, father-in-law, mother-in-law and siblings of the spouse For construction, development, sale etc. to a developer or promoter In any other case	₹ 500 ₹ 500 ₹ 500 ₹ 500 ₹ 500 Same as on a conveyance on the market value ₹ 500 See special points below: ₹ 500
	Special Points: 1. In case of (f), set off of duty paid will be given on execution of the conveyance 2. Duty payable under (g) will be ₹ 500 only if duty is already paid under Article 5 (g-a) on Development Rights’ Agreement
52	Release whereby a person renounces a claim upon other person or property If the release is of an ancestral property in favour of certain specified relatives without any consideration Every other Case	₹ 200 Same duty as on a conveyance as on the market value of the share, interest or part renounced
54	Security Bond or mortgage deed	₹ 5 for every ₹ 1,000 or part thereof (approx. 0.5%) of the amount secured Maximum ₹ 10,00,000
58	Surrender of Lease i) Without consideration ii) With consideration	₹ 200 Same duty as on a Conveyance on amount of consideration
59	Transfer of marketable debentures	Re. 0.50 for every ₹ 100 (approx. 0.05%) of the consideration amount of debentures
60	Transfer of lease by way of assignment (See article 36)	Same duty as leviable on a lease deed for the balance tenure of the lease.
61	Trust a) Where there is disposition of property i) For charitable or religious purpose	2% of the sum settled or market value of the property
	ii) In any other case where there is disposition of property	Same as on a conveyance on the amount settled or market value of the property
	b) where there is no disposition of property In any other case	₹ 500 (Same duty as bond (Article 13)
63	Works Contract for material and labour involving a transfer of property in goods
	Where the contract value does not exceed ₹ 10 lakh	₹ 500
	Where the contract value exceeds ₹ 10 lakh	₹ 500 + 0.5% of the contract value above ₹ 10 lakhs. The maximum duty is ₹ 25 lakhs

SOME IMPORTANT INSTRUMENTS UNDER INDIAN STAMP ACT

Transfer of shares in incorporated company or other body corporate

25 paise for every ₹ 100 or part thereof (approx. 0.25%) of value of shares

Bill of lading

₹ 1

Receipt

Value or amount which exceeds Rs. 5000 with payment for collection

₹ 1

Amount or Value of Subject Matter *	Court Fees
AD VALOREM COURT FEES PAYABLE UNDER THE BOMBAY COURT FEES ACT, 1959 (Wherever Applicable)
₹ 10,000	₹ 1,505
₹ 25,000	₹ 3,530
₹ 50,000	₹ 5,080
₹ 75,000	₹ 5,830
₹ 1,00,000	₹ 6,430
Over ₹ 1,00,000 and up to ₹ 11,00,000	₹ 6,430 + ₹ 200 for every ₹ 10,000 or part thereof (approx. 2%)
₹ 11,00,000	₹ 26,430
Over ₹ 11,00,000	₹ 26,430 + ₹ 1,200 for every ₹ 1,00,000 or part thereof (approx. 1.2%) – subject to a maximum fee of ₹ 3,00,000
₹ 2,38,97,500	₹ 3,00,000
₹ 2,50,00,000	₹ 3,00,000 (maximum fee)
* Only some of the slabs are given