stamp duty on deed of assignment in gujarat

• Submit Post
• Budget 2024
• Corporate Law

Rate of Stamp duties in Gujarat

What is Stamp duty?

Stamp duty is the tax amount an individual pays to the Government (Central and/or State of Gujarat) for executing various types of deeds or documents which have some sort of financial exchange, transaction or obligation associated with it. Stamp duty is also chargeable on the registration of sale, purchase or transfer of immovable property. Stamp duty is paid during the registration of a document or deed for e.g. for registration of Partnership deed or LLP agreement in case of LLP registration, the stamp duty is levied.

How to pay stamp duty?

• Stamp duty value is printed on stamp paper or e-stamp paper after the stipulated duty is paid.
• Stamp papers have different stamp values and each type of document/deed has to be executed on a stamp paper of a requisite value.
• Stamp value varies from region to region, and also on the value of the deed or transaction is executed.

Modes of Payment of Stamp duty in Gujarat:

Stamp duty rates in Gujarat:

Stamp duty charges vary from one state to another and may depend on gender, municipal areas or income groups within the state too. In Gujarat Basic rate of Stamp duty is 3.50% and Total rate is 4.90% i.e., Rs. 4.90 for every Rs. 100/- need to be paid as stamp duty for Gujarat Property Registration. The registration fee is 1.05%.

Here is a table showing Stamp duty rates in Gujarat for different documents, and agreements.

Table showing Stamp duty rates in Gujarat

About EbizFiling.com: EbizFiling.com is a motivated and progressive firm managed by like-minded people. It helps a variety of small, medium and large businesses to cater to all compliance requirements of Indian Laws. Get in touch for a free consultation on [email protected] or call 9643203209.

• Indian stamp act 1899
• « Previous Article
• Next Article »

Name: Ishita Ramani

Qualification: graduate, company: ebizfiling india private limited, location: ahmedabad, gujarat, india, member since: 04 oct 2017 | total posts: 216, my published posts, join taxguru’s network for latest updates on income tax, gst, company law, corporate laws and other related subjects..

• Join Our whatsApp Group
• Join Our Telegram Group

21 Comments

how to calculate Stamp duty & registration on Leave and liocense for 3 years in Gujarat State

Mr. A has purchase a apartment in 2002 directly from builder (With out paying Stamp duty) and I have purchased it from Mr. A in 2006 and paid stamp duty at the time of purchase. As per new changes in stamp duty law if I want to sell the apartment, is it necessary to pay stamp duty for the first purchase? if, yes at which jantri current or as on 2002?

i am a shareholder in kolkata. i am applying for duplicate share certificates to a co with regd office in gujarat . i will buy stamp paper in kolkata for indemnity bond , so the duty will go to bengal govt . so the value of stamp paper will be as per bengal rate or gujarat rate ? KINDLY GUIDE

Who will be responsible to pay stamp duty & in what amount in Ahmedabad Gujarat?

In 2000 @ Rs. 180000 Purchase by A from contactor In 2004 @ Rs. 325000 Purchase by ME from A In 2022 @ Rs. 1800000 me selling to C

Can you guide me?

what is the stamp duty for assignment deed? Provide reference for the same.

Whether stamp duty is exempted for BPL beneficiaries who are availing free3 LPG connection under Ujjawala scheme ?

On affidavit how much amount of notarial tickets are required to affix.

What is the rate of stamp duty applicable on Gold Loan Agreement in Gujarat

May I know the stamp duty levied by the Credit Co-operative society on loan amount of Rs.500000

Stamp Paper for Change in Constitution Partnership

May i know how much stamp duty pay for agriculture lend lease agreement (up to 1 year) in Gujarat

i want guidenance for partneship desolution

Is there any rule that the frenking touch to the words

In Gujarat: How much can a rental agreement be written on stamp paper?

Can u inform present stamp duty for Maninagar/ a’bad old apartment house flat transfer when a girl is purchasing .Is it possible to do on line or any ho d authorised/ local agent available.regs

please tell me :Who has to pay stamp duty for registration of a lease deed—the Lessor or Lessee?

For issue counter bank guarantee in Gujarat what stamp duty is impacted..

Please inform me how much Registration fee rate for female & men jointly buyers?

May i know how much stamp duty is to be paid by male on immovable property Land 618.43 sq. met + construction on land, survey no. 102, Village Vasana chacharwadi,Ta:Sanand, District:Ahmedabad, Gujarat

May i know how much stamp duty of construction on land 618.43 sq. met in survey no 102, village vasna chacharwadi, Ta: Sanand, Distr: Ahmedabad is to be paid. It is immovable property. Purchaser is male.

Leave a Comment

Your email address will not be published. Required fields are marked *

Post Comment

Subscribe to Our Daily Newsletter

Latest posts, live course on grow your idt practice & preparation for gstat (gst tribunal), taxation of distributed income from buyback of shares of domestic company, reassessment action u/s. 148 post approval of resolution plan unsustainable: delhi hc, notification 56/2023-ce dated 28.12.2023 is ultra vires section 168a of cgst act, 2017: gauhati hc, disallowance of deduction u/s. 80p by cpc is beyond the scope of adjustment u/s. 143(1): itat mumbai, no addition u/s. 68 towards unsecured loan if repayment in subsequent year accepted: itat ahmedabad, penalty u/s. 271d unwarranted as reasonable cause shown for cash receipt on sale of property: itat bangalore, order quashed as pre-condition for best judgement assessment u/s. 23(2) of mvat act not satisfied: bombay hc, contribution to national pension system before filing of return allowable: itat ahmedabad, passing of revisionary order u/s. 263 without giving adequate opportunity of being heard unsustainable: itat ahmedabad, latest case law related to ibc – april to june 2023, featured posts, sc upholds state governments’ tax levy on mining activities wef april 1, 2005, recent gst portal advisories: july-august 2024 updates, analysis on guidelines for second all-india drive against fake gst registrations, empanelment with bank of maharashtra for concurrent/revenue audit (last date 14.08.2024), guidelines for second special all-india drive against fake registrations, live course: handling faceless income tax assessment with ai tools like chatgpt, join 5-day live & online income tax audit course with practical examples, tax audit under income tax act: detailed live course with practical insights, share application money use before allotment, no separate bank account: mca imposes ₹1.71 crore penalty, one-day delay in opening separate account for share application money: mca imposes ₹31 lakh penalty, popular posts, due date compliance calendar august 2024, list of resolution required to be filed with roc in form mgt-14, empanelment for concurrent and stock audit with indian bank, form gstr 1 & gstr-1a- monthly statement of outward supplies | faqs, everything about directors report under companies act, 2013, statutory registers under companies act 2013, august, 2024 tax compliance tracker: income tax & gst deadlines, conversion of public limited company into private limited company, section 44ab vs 44ad – presumptive taxation (with examples).

• +919643203209
• [email protected]

For Indian Entrepreneur

• Private Limited Company
• Public Limited Company
• Limited Liability Partnership
• One Person Company (OPC)
• Sole Proprietorship
• Partnership
• Hindu Undivided Family (HUF), HUF Deed
• E-Commerce Business
• Company Registration in UK New
• Company Registration in USA New

For Foreign Entrepreneur

• Indian Subsidiary
• Company Registration by Foreigner

Special Entities

• Non Profit Organization
• Nidhi Company
• Producer Company

Tax Registrations

• GST Registration
• GST Modification
• PAN Application
• TAN Application

Other Registration

• IEC Registration
• IEC Modification
• ESIC Registration
• Digital Signature
• DIN Application
• EPF Registration
• SSI/MSME/Udyog Aadhar Registration
• GST Returns
• Income Tax Returns
• TDS Returns
• TDS Returns Revision
• ESI Returns

Annual Filings

• Private Limited Company Annual Filing
• LLP Annual Filing
• Public Limited Company Annual Filing
• OPC Annual Filing
• NPO/Section 8 Company Annual Filing
• Nidhi Company Annual Filing
• Producer Company Annual Filing
• Trust Annual Filing

Change Services

• Add A Director
• Removal/Resignation of Director
• Add/Remove a Partner in LLP
• Change in LLP Agreement
• Change of Registered Office Address
• Increase in Authorized Capital
• Change in DIN
• Surrender Your DIN
• Appointment of Auditors
• Share Transfer & Transmission
• Company Name Change
• LLP Name Change
• MOA/AOA Amendment
• MOA/AOA Printing
• Strike Off Company
• Strike Off LLP
• Dissolution of Firms
• Strike Off OPC

Legal Drafting

• Download Library
• Customized Drafting
• GST LUT Letter of Undertaking New
• GST Cancellation
• ROC Search Report New
• Commencement of Business (INC 20A) Filing New
• Trademark Registration
• Trademark Objections
• Trademark Assignment
• Trademark Renewal
• Trademark Opposition
• Trademark Withdrawal
• Trademark Rectification
• Trademark Watch Services
• International Trademark Registration
• Copyright Application
• Patent Registration

Designing & Marketing

• Logo Designing New
• Digital Marketing New
• --> Accounting
• --> Payroll
• --> CMA Report Prepartion
• --> Business Plan Preparation (Project Report)

• --> +919643203209
• --> [email protected]

• Posted On July 9, 2024
• Posted By By Dharti Popat
• Stamp duty and registration

All about Stamp Duty and Rates of Stamp Duty in Gujarat

Table of Content

What is Stamp Duty?

Stamp duty is the tax amount an individual pays to the Government (Central and/or State of Gujarat) for executing various types of deeds or documents that involve a financial exchange, transaction, or obligation. This duty is applicable to the registration of sale, purchase, or transfer of immovable property in Gujarat. During the registration of a document or deed, stamp duty in Gujarat is paid according to the fixed rates established by the state. For instance, when registering a partnership deed or an LLP agreement during LLP registration, the corresponding stamp duty is levied. This tax ensures that legal transactions are officially recorded and validated by the state.

How to pay Stamp Duty?

• Stamp Duty value is printed on stamp paper or e-stamp paper after the stipulated duty is paid.
• Stamp papers have different stamp values and each type of document/deed has to be executed on a stamp paper of a requisite value.
• Stamp value varies from region to region, and also on the value of the deed or transaction is executed.

Modes of Payment of Stamp Duty in Gujarat

What is Rate of Stamp Duty in Gujarat?

Stamp duty charges vary by state and can depend on gender, municipal areas, or income groups within the state. In Gujarat, the basic rate of stamp duty is 3.50%, and the total rate of stamp duty in Gujarat is 4.90%. This means Rs. 4.90 must be paid as stamp duty for every Rs. 100 in property registration. The registration fee is 1.05%.

Table showing Stamp Duty in Gujarat for different documents, and agreements

Download: PDF for Stamp Duty Rates in Gujarat

POPULAR ARTICLES

• All you need to know on Disqualification of…
• All you need to know on Rights and Duties of…
• Process of shifting a Registered Office from one…
• A guide on Section 111A and 112A of Income Tax Act
• “What is Ordinary Resolution and Special…

RECENT ARTICLES

• COMPLIACE CALENDAR FOR THE MONTH OF AUGUST 2024
• The Legal Dynamics of LLP Registration Simplified
• Rights of the Shareholders of a Company

BROWSE BY TOPICS

• 46th GST Council Meeting
• 47th GST Council Meeting
• 48th GST Council Meeting
• Article- Copyright
• Articles – Company Law
• Articles – Entrepreneurship
• Articles – GST
• Articles – Income Tax
• Articles – Non Residents
• Articles – Tradmark
• Company law
• Designing and Marketing
• Digital Marketing
• Entrepreneurship
• GST Council Meeting
• Human Resources
• Logo Designing
• Non residents
• Notifications
• Notifications – Company Law
• Notifications – Entrepreneurship
• Notifications – GST
• One Person Company
• Uncategorized

About Ebizfiling -

Author: dharti

Dharti Popat (B.Com, LLB) is a young, enthusiastic and intellectual Content Writer at Ebizfiling.com. She studied Law and after practicing as an Advocate for quite some time, her interest towards writing drew her to choose a different career path and start working as a Content Writer. She has been instrumental in creating wonderful contents at Ebizfiling.com !

Follow Author

2 thoughts on “ rate of stamp duties in gujarat ”.

Hi, do you have any idea of stamp duty applicability on machinery / immovable property on conversion of partnership firm to Company

Hello Ma’am,

You cannot convert a Partnership firm to Company. You need to dissolve your Partnership firm and register a new company. Contact us at +919643203209 / mail us at [email protected] , if you need any additional information or assistance.

Thank you for the query.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Dhanraj Bhuptani

They have a really good team of hardworking employees. I was guided and served very well.

Hemang Malhotra

I was new as an Entrepreneur when I had seen their post on social media. I contacted them regarding proprietorship and realized they their pricing is incomparable in the market also their services are really prompt. Thank you, Ebizfiling.

July 30, 2024 By Komal S

• Compliance Calendar
• Due dates for GST Returns
• Due dates for Income tax Returns
• Monthly compliance calendar

COMPLIANCE CALENDAR FOR THE MONTH OF AUGUST 2024 Timely payment of taxes provides several advantages, including cost savings and avoidance of financial problems such as low credit scores and penalties for non-compliance. Below, we outline the key compliance obligations for […]

July 29, 2024 By Komal S

• Right issues of shares
• Shareholder Agreement

Rights and Responsibilities of Shareholders of a Company Introduction The dynamic world of corporate governance places a significant emphasis on shareholders. These stakeholders are in a special position because they are granted certain privileges and given particular duties. This article […]

July 27, 2024 By Komal S

• Partnerships Firm
• Vendor Agreements

Exploring Vendor Agreements: A Comprehensive Overview Introduction In today’s business landscape, partnerships with vendors play a crucial role in ensuring the smooth operation and growth of enterprises. A well-defined and structured vendor agreement is essential for establishing a mutually beneficial […]

Hi, Welcome to EbizFiling!

Hello there!!! Let us know if you have any Questions.

Thank you for your message.

Stamp Duty Liability under the Gujarat Stamp Act: Delineating ‘Conveyance’ and ‘Instrument’

Introduction.

In the sphere of property transactions, the imposition of stamp duty is a significant aspect governed by the Gujarat Stamp Act. This act, through its definitions and provisions, determines when a document is legally recognized as a ‘conveyance’ or an ‘instrument’ and consequently, when it is liable for stamp duty. This article delves into the relevant legislative provisions from the Gujarat Stamp Act, the Registration Act, the Transfer of Property Act, and pertinent judicial interpretations that shape the understanding and enforcement of these terms.

Legal Provisions Defining ‘Conveyance’ and ‘Instrument’

The gujarat stamp act and stamp duty implications.

The Gujarat Stamp Act provides definitions for ‘conveyance’ and ‘instrument’, which are crucial in determining the applicability of stamp duty.

Definition of ‘Conveyance ’: The term ‘conveyance’ under the Gujarat Stamp Act includes a wide array of documents that facilitate the transfer of property rights. It encompasses deeds of sale, certain decrees or orders of civil courts, and other specified instruments.

Definition of ‘Instrument’ : The term ‘instrument’ is a broad one that covers any document that creates, alters, or extinguishes rights or liabilities. Notably, it extends to electronic records in line with the Information Technology Act, 2000.

The Registration Act: Ensuring Legality of Documents

The Registration Act plays a crucial role in conferring legality to documents. It mandates the registration of certain documents, including those that pertain to conveyance. This facilitates the establishment of titles in courts.

The Transfer of Property Act: Transference and Rights

The Transfer of Property Act details the legal procedures for transferring property. It includes provisions that intersect with ‘conveyance’ as defined in the Gujarat Stamp Act.

Judicial Interpretations and Case Law on applicability of Stamp duty

The case of bic cello (india) pr… v. state of gujarat.

In this pivotal case, the Gujarat High Court scrutinized the definitions of ‘conveyance’ and ‘instrument’ to determine the applicability of stamp duty on a rectification deed. The court concluded that rectification, which merely corrects the survey numbers without altering property rights, does not attract stamp duty.

Precedents Cited within the Judgment

Prasad Technology Park Pvt. Ltd. vs. Sub Registrar : In this case, the Supreme Court established that supplementary agreements, which do not create new rights or transfer property, should not attract stamp duty.

Tabulation of Relevant Provisions

Here are some relevant provisions from different acts:

Gujarat Stamp Act

Registration Act

Transfer of Property Act

Conclusion: Ensuring Compliance with Stamp Duty Regulations

Understanding the definitions of ‘conveyance’ and ‘instrument’ under the Gujarat Stamp Act is crucial for legal practitioners and parties involved in property transactions. It is imperative to discern whether a document necessitates stamp duty to ensure compliance with legal obligations and to avoid potential disputes. The discussed judicial precedents further clarify the application of these definitions, providing a clearer roadmap for navigating the intricacies of property transfer taxation.

Users also read...

Economic Impact of Drug Trafficking on Rural Indian Communities

Intersection of Traditional Practices and Modern Drug Laws

Understanding the Judgment in Sushila Aggarwal vs. State NCT of Delhi: A Comprehensive Analysis

The Nondelegation Doctrine

• Accounting and Auditing
• Agriculture
• Alternative Dispute Resolution
• Artificial Intelligence
• Banking/Finance Law
• Bombay High Court
• Central Bureau of Investigation (CBI)
• Commercial Law
• Constitutional Law
• Consumer Protection
• Contract Law
• Copyright law
• Corporate Governance
• Criminal Justice
• Criminal Law
• Cryptocurrency
• Current Events
• Customs Law
• Cybersecurity
• Defamation Law
• Delhi High Court
• Digital Law
• digital media
• Economic Policy
• Education Law
• Employee Welfare
• Employment Rights
• Enforcement Directorate (ED)
• Entrepreneurship/Startup
• Environmental Law
• Financial Investment
• Foreign Portfolio Investors
• Freedom of Speech
• Gold Investment
• Government Regulations
• Healthcare Policy
• Human Rights
• Import & Export
• Intellectual property (IP)
• International Law
• International Trade Regulations
• Investment Regulations
• IT & BPM
• Jammu and Kashmir and Ladakh High Court
• Judicial Decisions
• Judicial Interpretation
• Juvenile Law
• Kerala High Court
• Legal Affairs
• Legal Procedure
• liquidation
• Manipur High Court
• Market Analysis & Trends
• Media and Journalism
• Micro Small and Medium Enterprises
• Minor Rights
• Motor Accidents
• National Company Law Tribunal(NCLT)
• National Security
• Politics and Current Affair
• Politics and Current Affairs
• Prevention of Money Laundering Act PMLA
• Privacy and Data Protection
• Property Law
• Publications
• Punjab & Haryana High Court
• Rajasthan High Court
• Real Estate
• Recruitment
• Retirement Benefits
• SARFAESI Act
• Securities Law
• Small and Medium Enterprises (SMEs)
• small and medium-sized enterprises (SMEs)
• Social Justice
• Social Media
• Stock Market
• Strategic Management
• The Central Board of Direct Taxes (CBDT)
• Traditional / Cultural Practices
• Uncategorized
• Voting Procedures

Recent Posts

Trending Topics

Accountability Business CIRP Corporate Insolvency Resolution CORPORATE LAWYERS Customs Act Customs Law Gujarat High Court IBC Insolvency and Bankruptcy Code 2016 legal precedent NCLAT NCLT Supreme Court Transparency

Bhatt & Joshi Associates Office No. 311, Grace Business Park B/h. Kargil Petrol Pump, Epic Hospital Road, Sangeet Cross Road, behind Kargil Petrol Pump, Sola, Sagar, Ahmedabad, Gujarat 380060 9824323743

We're Hiring!

Request for Document Service

Blog Article

Stamp duty in gujarat: the essentials.

posted in General by Krupesh Bhat

What Is Stamp Duty?

Stamp duty is the tax amount an individual pays to the Government (Central and/or State of Gujarat) for executing various types of deeds or documents which have some sort of financial exchange, transaction or obligation associated with it. Stamp duty is also chargeable on the registration of sale, purchase or transfer of immovable property. Stamp duty is paid during the registration of a document or deed.

Stamp duty value is printed on stamp paper or e-stamp paper after the stipulated duty is paid. Stamp papers have different stamp values and each type of document/deed has to be executed on a stamp paper of a requisite value. Stamp value varies from region to region, and also on the value of the deed or transaction being executed.

Gujarat State Stamp Act

The Gujarat State Stamp Act, 1958, was established based on the Bombay Stamp Act, 1958 (specifically refers to electronic records).  This Act set the platform and foundation for how Stamps and Rules relating to Stamps are dealt with in the State of Gujarat.

This was followed by the State passing the Bombay Stamp (Gujarat Amendment) Act. Other notable amendments made to the Bombay Stamp (Gujarat Amendment) Act were passed in 1970, 1976, 2006, 2007, 2013, 2015 and 2016.

The Gujarat Stamp Amendment Bills passed made these key amendments:

• The Stamp duty rates on the transfer of shares, bonds, instruments, registration and amalgamation were all increased.
• Mandatory for developers to register partnership deeds.
• The Government has permitted the use of self attested agreements online so that neither parties have to go to the Registrar’s Office. Individuals in the State of Gujarat can self attest and register rental agreement and leave and license agreement online.
• The penalty for stamp duty evasion is 200% of the value of the document executed.
• Stamp Duty is collected to authenticate the registration, transfer and/or sale of any instrument, deed or property with a value of more than INR 100 as per Section 17 of the Registration Act, 1908.

Stamp duty or non-postal stamps are obtained at a nodal point (M.S. Building, Lal Darwaja office), and then distributed to the rest of Gujarat. The head of the nodal point is the Superintendent of Stamps. Non-postal stamps are received from the India Security Press Nasik and redistributed to District Treasury Offices across the State. For a list of registrable and non-registrable documents , do read up more on Stamp duty in the State of Gujarat.

Modes Of Payment Of Gujarat Stamp Duty

Rates Of Stamp Duty In Gujarat

How Can We Help?

LegalDesk.com is an established legal tech service provider of drafts of agreements and related services to individuals and companies in India. Get rental agreements drafts , wills, partnership agreements, gift deeds , power of attorney deeds , affidavits , etc. to e-stamping services and incorporation services , LegalDesk.com has got you covered.

Require a Service? Request one now!

gujarat registration stamp duty stamp paper

about author

Krupesh Bhat

Related Articles

Due to non-compliance with the Prevention of Money Laundering Act (PMLA), the Central Government’s Financial Intelligence Unit...

Blockchain Technology has been making a collective difference to the global economy. It’s refreshing approach to Information...

Filing a  consumer complaint is a power all of us have. Any product or a service that...

Latest Comments

There are 0 comments on "Stamp Duty In Gujarat: The Essentials".

post comment Cancel reply

Your comment:

Your email*

Save my name, email, and website in this browser for the next time I comment.

Recent Articles

The new Act emerging from Tamil Nadu has made the written agreement mandatory to grant legal status for all...

The draft code circulated by the Ministry of Housing and Urban Affairs proposed a new set of tenancy laws...

This day marks a milestone for the UIDAI (Unique Identification Authority of India) and private entities that undertake Aadhaar-based...

Find out why the handsome hunks and beauty queens of Bollywood made changes to their names. Was it because...

Don’t like your surname after divorce? Change it using LegalDesk.com in a Quick, Hassle-free way. A divorce is a...

Blockchain Technology

Consumer Complaints

Infographics

Name change

Power of Attorney

Real Estate

Rental Agreements

Teachers Month

Times of India

Request Callback

Request for incorporation package, request for business package.

By accessing the website www.legaldesk.com, you acknowledge that you are seeking information about Legaldesk of your own accord and that there has been no form of solicitation, advertisement, or inducement by Legaldesk or its employees or members. The content on this website is for informational purposes only and should not be construed as soliciting or advertisement. No material or information provided on this website should be considered legal advice. LegalDesk.com does not provide any legal advice, consultation, accounting or auditing services, and is not a law firm, chartered accountancy, or company secretary firm. The services provided by LegalDesk.com cannot be construed as a substitute or alternative for legal advice. The website provides legal articles, news, and drafts for informational and educational purposes only. However, due to changing laws and amendments in the law, we cannot guarantee the accuracy or correctness of the content provided therein. Please be aware that due to the differences in laws across jurisdictions, we do not assure the accuracy and applicability of any documents or templates or other services in other jurisdictions. Please consult your lawyer or chartered accountant for the same. The use of this website does not create an attorney-client relationship between LegalDesk.com, its employees, and any customer.

• Popular Courses
• CCI Pro @20% OFF
• More classes
• More Courses
•   Start a discussion
•   Unanswered
• Report Abuse

Stamp Duty on Deed of assignment

CS Snehal (Compliance Manager) (346 Points)

BOMBAY STAMPS ACT, 1958 (As applicable to the State of Gujarat)

ORDER DATED 25 TH FEBRUARY, 1998

No. GHM - 98-221H.STP/1096/2527/H.1. In exercise of the powers conferred by Clause (a) of Section 9 of the Bombay Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby reduces the duty with which an instrument of securitisation of Loans or the Assignment of Debt with underlying securities is chargeable under Article 20(a) of Schedule 1 to the said Act, to ten paise for every rupees 100 or part thereof of the loan securitised or debt assigned with underlying securities.

 2 Replies

CourseCart.in (Mentor at SHAYVIDZ Academy)   (3756 Points) --> Replied 02 October 2010

thanks for this query Snehal.. I also wanna know the same..

Online classes for CA CS CMA. Professional courses for GST, Tally, Others & Books

devcharan (sr.ex) (22 Points) --> Replied 28 October 2011

pls let me know the stampduty on deed of assignment in andhra pradesh? And also let me know relevant clause which deals with stampduty on deed of assignment?

Leave a reply

Your are not logged in . Please login to post replies Click here to Login / Register   

Recent Topics

• GearHead Engineers; Absolute Game Changer in Count
• 27Q return filed in wrong quarter, correction poss
• Latest ISACA COBIT-Design-and-Implementation Exam
• Can you provide the salary ITR computation formate
• Can we switch regime while filing ITR-U?
• Intt on gstr3b and TDS
• Want to opt for FTE service
• ITR for profit made from share trading
• Net interest income - ITR
• E verification of assessee who has passed away.

More recent discussions | Post

Related Threads

Popular discussion.

view more »

Trending Online Classes

LIVE Course on Foreign Exchange Management Act (FEMA)(with recording)

5 days Certification Course on GST Practical Return Filing Process

Mastering Power BI for Financial Analysis - Data-Driven Finance

Subscribe to the latest topics :

Search forum:.

Whatsapp Groups

Login at caclubindia, caclubindia.

India's largest network for finance professionals

Alternatively, you can log in using:

Bringing you the Best Analytical Legal News

• Case Briefs

Reduction in stamp duty cannot lead to revenue splitting an instrument into two once it has already been charged under a correct charging provision: Supreme Court 

Supreme Court: While dealing with a case under the Gujarat Stamp Act, 1958, the bench of Hemant Gupta and V. Ramasubramanian*, JJ has held that

• Click to share on Facebook (Opens in new window)
• Click to share on Twitter (Opens in new window)
• Click to share on LinkedIn (Opens in new window)
• Click to share on WhatsApp (Opens in new window)
• Click to print (Opens in new window)
• Click to email a link to a friend (Opens in new window)
• Click to share on Telegram (Opens in new window)
• Click to share on Reddit (Opens in new window)
• Click to share on Tumblr (Opens in new window)
• Click to share on Pinterest (Opens in new window)
• Click to share on Pocket (Opens in new window)
• Click to share on Skype (Opens in new window)

Supreme Court : While dealing with a case under the Gujarat Stamp Act, 1958, the bench of Hemant Gupta and V. Ramasubramanian *, JJ has held that once a single instrument has been charged under a correct charging provision of the Statute, namely Article 20(a), the Revenue cannot split the instrument into two, because of the reduction in the stamp duty facilitated by a notification of the Government issued under Section 9(a).

In the case at hand, the Oriental Bank of Commerce (OBC) granted certain facilities to a borrower and the borrower committed default in repayment. Unable to recover the loan, the Bank assigned the debt in favour of the appellant, an Asset Reconstruction Company registered with the Reserve Bank of India under Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

An audit objection was raised by the Office of the Accountant General on the ground that the deed of assignment contained a reference to a Power of Attorney (PoA) in Schedule 3 and that the said PoA was chargeable to stamp duty under Article 45(f) of Schedule-I to the Act. A demand for deficit stamp duty to the tune of Rs.23,53,800/¬ was raised pursuant to the audit objection.

The Gujarat High Court examined the recitals contained in the deed of assignment and found that the Bank had agreed to execute an irrevocable PoA in favour of the appellant, substantially in the form set out in Schedule 3 of the deed of assignment. The form set out in Schedule 3 contained recitals empowering the assignee, as the agent of the Bank, to sell any immovable property. Therefore, considering the fact that Article 45(f) of Schedule I to the Act makes a PoA given for a consideration and containing an authority to sell any immovable property chargeable to stamp duty as a conveyance, the High Court came to the conclusion that the appellant has to pay stamp duty as fixed by Article 45(f). The High Court opined that merely because the power to sell, forms part of the deed of assignment under Schedule 3, the appellant could not escape the charge of duty and that the PoA is required to be considered independently.

The Supreme Court was, however, of the opinion that the High Court overlooked the fact that there was no independent instrument of PoA and that in any case, the power of sale of a secured asset flowed out of the provisions of the SARFAESI Act and not out of an independent instrument of PoA.

Section 2(zd) of the SARFAESI Act defines a ‘secured creditor’ to mean and include an Asset Reconstruction Company. The appellant had acquired the financial assets of OBC in terms of Section 5(1)(b) of the SARFAESI Act. Therefore, under sub-section (2) of Section 5 of the SARFAESI Act, the appellant shall be deemed to be the lender and all the rights of the Bank vested in them. In fact, under Amendment Act 44 of 2016, sub-section (1A) was inserted in Section 5 of the SARFAESI Act, exempting from stamp duty, any document executed by any bank 5 under Section 5(1) in favour of an Asset Reconstruction Company acquiring financial assets for the purposes of asset reconstruction or   securitization.

It was further explained that for invoking Article 45(f), two conditions have to be satisfied. They are,

• the PoA should have been given for a consideration; and
• an authorization to sell any immovable property should flow out of the instrument.

In the case on hand, the consideration paid by the appellant to OBC, was for the purpose of acquisition of the financial assets, in respect of a particular borrower. The draft of the PoA contained in Schedule 3 of the deed of assignment was only incidental to the deed of assignment. The deed of assignment has already been charged to duty under Article 20(a) which deals with “conveyance”. In fact Article 45(f) also requires a PoA covered by the said provision to be chargeable to stamp duty under Article 20.

The Court, hence, held that after having accepted the deed of assignment as an instrument chargeable to duty as a conveyance under Article 20(a) and after having collected the duty payable on the same, it is not open to the respondent to subject the same instrument to duty once again under Article 45(f), merely because the appellant had the benefit of the notifications under Section 9(a).

Hence, the judgment of the High Court and the demand made by the Chief Controlling Revenue Authority was set aside.

[Asset Reconstruction Co. (India) Ltd v. Chief Controlling Revenue Authority, 2022 SCC OnLine SC 515 , decided on 26.04.2022]

*Judgment by: Justice V. Ramasubramanian

For appellant: Senior Advocate V. Chitambaresh

For State of Gujarat: Advocate Archana Pathak Dave

Section 125 CrPC: Can the second wife be entitled to maintenance from her husband?

Delhi HC granted bail to a man accused of raping woman he met on dating app on pretext of marriage

Do convicts have a fundamental right to procreate? Watch to know what Delhi High Court recently held

Book release of 8th edition of “Criminology, Penology and Victimology” revised by Sanjay Vashishtha

Join the discussion, leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Notify me of follow-up comments by email.

Notify me of new posts by email.

This site uses Akismet to reduce spam. Learn how your comment data is processed .

• Law of torts – Complete Reading Material
• Weekly Competition – Week 4 – September 2019
• Weekly Competition – Week 1 October 2019
• Weekly Competition – Week 2 – October 2019
• Weekly Competition – Week 3 – October 2019
• Weekly Competition – Week 4 – October 2019
• Weekly Competition – Week 5 October 2019
• Weekly Competition – Week 1 – November 2019
• Weekly Competition – Week 2 – November 2019
• Weekly Competition – Week 3 – November 2019
• Weekly Competition – Week 4 – November 2019
• Weekly Competition – Week 1 – December 2019
• Sign in / Join

• Featured Student Assignments (LawSikho)

Stamp duty, attestation and registration of lease and agreements

This article is written by Adv. Priscilla Rodrigues, pursuing a  Certificate Course in Real Estate Laws  from  Lawsikho.com .

Table of Contents

Introduction

Buying a house is one of the most important financial choices anyone can make in their lives. It is a daunting financial as well as emotional experience where we need to recognise the property during the purchase of a home, make a down payment, apply for loan, sign the selling agreement etc. Thereafter comes the possession which is the actual transfer of the property but this is not enough as we will need to provide patented legal proof. To do this, you would need to get the property registered in the local municipal records in your name, with the seller reporting that the property is being sold. You’ll also have to pay a stamp duty at the time of registration which is a government tax imposed on property transactions. 

A lot of people however prefer not buying their own house due to various reasons as it suits their own financial ambitions and the lifestyles that they enjoy. Owning a home leaves you vulnerable to unexpected spending and distractions nibbling away at what’s available for investment. It can also restrict your mobility and your independence.

With leasing, you’ve got a planned, stable cost that you can schedule throughout the year. You wouldn’t have to neglect or skip job opportunities that come your way.

So, when you’re looking for or living in a rented house, apartment, or home, the same needs to be registered and stamp duty needs to be paid on it.

Stamp duty on lease agreements

Stamp duties are payable pursuant to Section 3 of the Indian Stamp Act, 1899. It is a tax paid to the government, similar to the income tax. Stamp Duty is payable in full and is to be paid on the deadline. If payment of the stamp duty is delayed, it will incur a fine. A stamp duty paying instrument or document is deemed to be a legitimate and legal document and can be admitted as evidence in court. Any document that is not appropriately stamped, cannot be admitted as evidence in court.

Stamp duty shall be paid in the manner specified by the applicable stamp laws of the State in India where the property is situated for the execution of any lease agreement. According to the Constitution of India, the stamp duty on such instruments is a ‘state issue’ and therefore the applicable stamp duty can vary from state to state. 

In general, the stamp duty is paid on the basis of the term of the contract, the amounts of the rent, the premium, and/or any other form of rent and premium that may be specified in the proposed lease agreement. Minimum circle rates were also defined by the respective State Governments in some Indian states. In such states, either the specific rent specified in the lease agreement or the minimum circle rates provided by the applicable state government which will be much higher are expected to be paid stamp duty. 

Why are rent agreements registered

Section 17 of the Registration Act 1908 makes it compulsory to register a lease agreement Section 17(1)(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

This makes it imperative that immovable properties from year to year or for any period exceeding twelve months require compulsory registration at the office of the Assurance Sub-Registrar with jurisdiction over the place where the property to be leased is located. Both the parties i.e. the tenant and the landlord must be present together with two witnesses for attestation in order to register the deed. If all parties are not present together, he/ she must sign the Power of Attorney, giving the agent the authority to sign the agreement. 

The Registration Act, 1908 makes an instrument that requires mandatory registration to be registered within four months from the date of its execution The Registrar can, at his discretion, issue an extension of an additional four months by imposing a penalty of up to ten times the registration fee, given that such failure to present the instrument within the first four months.

Apart from the mandatory requirement that a lease agreement should be registered it also forms an important aspect in a landlord-tenant relationship. It not only facilitates the relationship between the parties but also preserves their interests. The landlord and the lessee must never compromise for an oral contract as it is not protected by statute, and should thus always rely on a written agreement being enforced.

Why is the rent contract for 11 months

We must have noticed that mostly rent agreements are made for 11 months. We may even wonder why that is so. This is mainly done so that the stamp duty and other charges could be avoided. Under the Registration Act, 1908, registration of a lease agreement is compulsory if the lease term extends 12 months. If an agreement is registered, the parties will have to pay stamp duty and the registration fee. If the agreement is made for 11 months it could save a few extra bucks and the time that the entire process of registration would take. 

Stamp duty on rent agreement in UP and Gujarat

The provisions of the Registration Act, 1908 makes it imperative that all the Rental Agreements are registered if you are making it for more than one year. 

Uttar Pradesh  

The stamp duty payable is governed by The U.P. Stamp Act, 2008.

The stamp duty to be paid on rental agreements are as follows:

• If the lease is to be for a term not exceeding three years; then the Stamp Duty will be 2% of the Annual Rent.
• where the lease is for a term exceeding three years but not exceeding five years then the stamp duty will be 2% of consideration equal to three times the amount or value of the average annual rent reserved.
• where the lease is for a term exceeding five years but not exceeding ten years; then the stamp duty will be 2% of consideration equal to five times the amount or value of the average annual rent reserved.
• where the lease is for a term exceeding ten years but not exceeding twenty years; then the stamp duty will be 2% of consideration equal to ten times the amount or value of the average annual rent reserved.
• where the lease is for a term exceeding twenty years but not exceeding thirty years or does not purport to be for any definite term; then the stamp duty will be 2% of consideration equal to twenty times the amount or value of the average annual rent reserved.
• where the lease is for a term exceeding thirty years or in perpetuity; then the stamp duty will be the same as a duty for Conveyance for a consideration equal to the market value of the property which is the subject of the lease.

Registration of the agreement

Once the agreement is made and signed and if the lease is for less than a year then the document can be attested from the Notary Public and if the lease is for more than a year then it needs to be registered at the Local Sub-Registrar to make it legally enforceable in case of a dispute. A Registered rental agreement retains more evidentiary force compared to Notarized rental agreement.

Documents required for the registration process

• One Original Identity Proof of Owner and Tenant.
• Two Passport Size Photograph of each-Owner and Tenant.
• Two Witnesses with their Original Identity Proof.

The stamp duty payable in the state of Gujarat is governed by the Gujarat State Stamp Act, 1958, which was based on the Bombay Stamp Act, 1958.

• If the lease is made for a term which is between 1 – 5 years then the stamp duty payable will be 1.50% of the average annual rent reserved.
• If the lease is made for a term which is between 1 – 10 years then the stamp duty payable will be 3% of the average annual rent reserved.
• If the lease is made for a term which is between Lease deed 1 – 15 years then the stamp duty payable will be 6% of the average annual rent reserved.
• If the lease is made for a term which is between 1- 20 years then the stamp duty payable will be 6% of the average annual rent reserved.
• If the lease is made for a term which is above 20 years then the stamp duty payable will be 6% of the average annual rent reserved.

A rental agreement written on a Stamp paper is not enforceable if not registered at a Sub-Registrar Office. Thus, one is required to record the same with a Sub Registrar office to make it legally enforceable in case of a dispute.

When a rental agreement is signed, both the landlord and the occupant should maintain full fairness in the best interests of both the parties. 

The rental agreements can be registered after the occupant moves in but should not be postponed anyway. The agreement can be registered either online or physically at the sub registrar’s office in Gujarat.

The Documents required for the registration process in Gujarat is the same as those required in Uttar Pradesh as elaborated above.

If we look at all the applicable laws in the country, we can see that for all agreements to be valid and enforceable in the courts of law they need to be attested and stamped appropriately executed. The same tax, however, would be as under the laws of the respective State. Where e-stamping facilities are provided for by State legislation, the same shall be used to advance towards the aim of a paperless economy. Whereas the value and legitimacy of e-agreements and e-stamping has yet to be accepted by some Governments. Both the state and central government are looking forward to making clear arrangements for e-agreements and e-stamping with a view to saving time and money and making business simpler.

The Indian Stamp Act, 1899.

The Registration Act 1908.

The U.P. Stamp Act, 2008.

The Gujarat State Stamp Act, 1958.

https://www.edrafter.in/rent-agreement-gurgaon.

https://legaldesk.com/documents/rental-agreement/up-noida.

Students of  Lawsikho courses  regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA

Follow us on  Instagram  and subscribe to our  YouTube  channel for more amazing legal content.

RELATED ARTICLES MORE FROM AUTHOR

Unmasking necrophilia in india : a legal examination under bns, contractual obligations : how to define deliverables clearly, why does a woman’s religious identity in india still depend on who she’s married to.

UP Stamp Act 2008 is repealed by the Uttar Pradesh Stamp (Repeal) Act, 2019. However Schedule I-B, proviso to Article 35 (c) (i), which shall be applicable mandates that 2% stamp duty shall be payable where the lease purposes to letting of a building or flat for a term duly not exceeding five years.

LEAVE A REPLY Cancel reply

Save my name, email, and website in this browser for the next time I comment.

How to kickstart your career as a corporate lawyer

Participants from more than 85 countries have attended our bootcamps so far

Register now

Thank you for registering with us, you made the right choice.

Congratulations! You have successfully registered for the webinar. See you there.

Stamp Duty on Assignment of Receivables

[email protected]

Updated as on 07.05.2024

The table below provides the rate of stamp duty applicable on assignment of receivables in major states across India:

[1] Notification G.O.Ms. No.305 dated 29.03.2004 issued by Registration and stamps Department, Government of Andhra Pradesh. This shall apply to ARC’s.

[2] Notification S.O.No.-1/M1-126-2004/2904 dated 29.12.2004 issued by Department of Registration, Government of Bihar. This shall apply to ARC’s.

[3] Notification No./F10-9-2004-C.T.-(R) –V-(32) dated 28.02.2004 issued by Financial and Planning Department {Commercial Tax (Registration) Department}, Government of Chhattisgarh.

[4] http://delhi.gov.in/wps/wcm/connect/DoIT_Revenue/revenue/home/registration+acts+and+rules/manuals%2Cnotifications%2Corders/reg260209

[5] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[6] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[7] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[8] 1.  Notification No. Stamp-6/05/35723/R. dated 31.08.2005 issued by Revenue Department, Government of Orrisa. 2. Notification No. Stamp-6/05/35723/R. dated 31.08.2005 issued by Revenue Department, Government of Orrisa.

[9] http://igrs.rajasthan.gov.in/writereaddata/Portal/Images/pdf/notification-dated-26062015.pdf

[10] Notification No.K.N.5-1023/11-2005-500(137)-2003 dated 15.03.2005 as amended by No.K.N.5-1389/11-2005-500(137)/2003 dated 29.03.2005 issued by Kar Evam Nibandhan Anubhag-5, Government of Uttar Pradesh.

[11] Notification No.2307-F.T. dated 02.07.2004 issued by Finance (Revenue) Department, Government of West Bengal.

You might also like

can you please provide copy of the Notification No.2307-F.T. dated 02.07.2004 issued by Finance (Revenue) Department, Government of West Bengal.

Leave a Reply

Leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Subscribe to receive regular updates!

• [email protected]

Stamp Duty on Debt Assignment

Home | Knowledge Center | Thought Papers Stamp Duty on Debt Assignment

13th Feb, 2018

• /our-partners/ /"> ,

Introduction

Assignment of debt is one of the most common forms of transactions in financial markets. It essentially entails transfer of a debt from a creditor (assignor) to a third-party (assignee). One of the biggest challenges faced in debt assignment transactions in India is the significant stamp duty implication on the deed of assignment. Considering the volume of assignment transactions undertaken generally by banks and financial institutions or by asset reconstruction companies (“ ARCs ”), the stamp duty levied becomes a significant cost in such transactions. The Constitution of India (“ Constitution ”) confers upon the Parliament and each State Legislature the power to levy taxes and other duties. The subjects on which the Parliament or a State Legislature or both can legislate are specified in the Seventh Schedule of the Constitution. The Seventh Schedule is divided into 3 (three) lists:

• Union List;
• State List; and
• Concurrent List.

The Parliament has the exclusive power to legislate on the subjects enumerated in the Union List. The State List enumerates the subjects on which each State Legislature can legislate and such laws operate within the territory of each State. The Parliament, as well as the State Legislatures, have the power to legislate over the subjects listed in the Concurrent List.

The entry pertaining to levy of stamp duty in the Union List is as follows: -

“91. Rates of 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.”

The entry pertaining to levy of stamp duty in the State List is as follows: -

“63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty.”

The entry pertaining to levy of stamp duty in the Concurrent List is as follows: -

“44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty.” [emphasis supplied]

From the aforementioned entries, it is clear that the power to legislate on the rate of stamp duty chargeable on instruments of debt assignment (since it is not covered under Entry 91 of the Union List) is with the State Legislature. However, the power to determine whether stamp duty can be charged or not on a specific instrument is in the Concurrent List. In this regard, it may be noted that pursuant to the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 (“ Amendment Act ”), the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“ SARFAESI ”) and the Indian Stamp Act were amended to provide for an exemption from stamp duty on a deed of assignment in favour of an ARC.

As mentioned above, the power to legislate on whether stamp duty is payable or not on an instrument is in the Concurrent List. Therefore, the Parliament has the power to legislate on the aforesaid subject.

Pursuant to the Amendment Act, section 5(1A) was inserted in SARFAESI which provides that any agreement or document for transfer or assignment of rights or interest in financial assets under section 5(1) of SARFAESI in favour of an ARC is not liable to payment of stamp duty.

In several States, notifications have been issued for remission and/ or reduction of stamp duties on debt assignment transactions. For instance, in Rajasthan, the stamp duty chargeable on any agreement or other document executed for transfer or assignment of rights or interests in financial assets of banks or financial institutions under section 5 of SARFAESI in favour of ARCs 1 has been remitted. Further, in Maharashtra, the stamp duty on instrument of securitization of loans or assignment of debt with underlying security has been reduced to 0.1% (zero point one percent) of the loan securitized or the debt assigned subject to a maximum of Rs. 1,00,000 (Rupees one lac) 2 .

Certain State Governments, such as those of Rajasthan and Tamil Nadu have reduced the stamp duty based on the nature of the financial asset being assigned. In Rajasthan, the stamp duty has been reduced for assignment of standard assets whilst in Tamil Nadu, the stamp duty has been reduced for assignment of non-performing assets and assignment in favour of ARCs.

This paper discusses a recent decision by the Allahabad High Court in the case of Kotak Mahindra Bank Limited v. State of UP & Ors. 3 (“ Kotak case ”), where it was held that an instrument of assignment is chargeable with stamp duty under Article 62(c) (Transfer) of Schedule 1B of the Indian Stamp Act, as applicable in Uttar Pradesh (“ UP Stamp Act ”), as opposed to Article 23 (Conveyance) of Schedule 1B of the UP Stamp Act.

The stamp duty payable in various States under Article 23 or the relevant provision for conveyance is on an ad valorem basis whereas the stamp payable under Article 62(c) or relevant provision for transfer of interest secured, inter alia, by bond or mortgage deed, is a nominal amount. For instance, in Uttar Pradesh, the stamp duty payable under Article 62(c) is Rs. 100 (Rupees one hundred).

Decision in the Kotak case

In the Kotak case, Kotak Mahindra Bank Limited (“ Kotak ”) had purchased and acquired certain loans from State Bank of India (“ Assignor ”) along with the underlying securities.

The question for consideration before the full bench of the Allahabad High Court was whether the deed executed by the applicant with the underlying securities would be chargeable with duty under Article 62(c) or Article 23 of Schedule 1B of the UP Stamp Act.

The court observed that in order to determine whether an instrument is sufficiently stamped, one must look at the instrument in its entirety to find out the true character and the dominant purpose of the instrument. In this case it was observed that the dominant purpose of the deed of assignment entered into between Kotak and the Assignor (“ Instrument ”), was to transfer/ assign the debts along with the underlying securities, thereby, entitling Kotak to demand, receive and recover the debts in its own name and right.

Article 11 of Schedule 1B of the UP Stamp Act provides that an instrument of assignment can be charged to stamp duty either as a conveyance, a transfer or a transfer of lease. The court observed that since the Instrument was not a transfer of lease, it would either be a conveyance or a transfer.

The court referred to the definition of conveyance in the UP Stamp Act, which reads as follows:

““ 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 Schedule I, Schedule IA or Schedule IB] [as the case may be];” [emphasis supplied]

The court held that the term conveyance denotes an instrument in writing by which some title or interest is transferred from one person to other and that the use of the words “on sale” and “is transferred” denote that the document itself should create or vest a complete title in the subject matter of the transfer, in the vendee. In this case since under the Instrument, the rights of the Assignor to recover the debts secured by the underlying securities had been transferred to Kotak, it was held that the requirement of conveyance or sale cannot be said to be satisfied.

The court further observed that debt is purely an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property. Where a transaction does not affect the transfer of any immovable or movable property, Article 23 of Schedule 1B cannot have any applicability.

The court’s view was that since debt along with underlying securities is an interest secured by bonds and/ or mortgages, transfer of such debt would be chargeable under Article 62(c).

The court further clarified that under the Instrument, merely the right under the contract to recover the debts had been transferred. Since the borrower(s) had never transferred the title in the immovable property given in security to the Assignor, the Assignor could merely transfer its rights i.e. mortgagee's rights in the property to recover the debts. It was further observed that the Assignor never had any title to the underlying securities and that it merely had the right to enforce the security interest upon default of the borrower(s) in repayment. The right transferred to Kotak was primarily the right to recover the debts, in accordance with law, by proceeding against the underlying security furnished by the bonds/ mortgage deed(s).

Therefore, the court held that the Instrument was chargeable with stamp duty under Article 62(c) of Schedule 1B of the UP Stamp Act.

Whilst coming to the conclusion that assignment of debt would not constitute a conveyance, the court referred to the definition of conveyance to state that debt is an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property.

In this regard, it may be noted that there are various judicial precedents 4 , where it has been held that an interest (including mortgage interest) in immovable property is itself immovable property.

However, even assuming assignment of debt with underlying securities over immovable property amounts to a conveyance, it

may be pertinent to refer to the definition of conveyance in the UP Stamp Act which specifically excludes a conveyance which is otherwise provided for by the Schedule to the UP Stamp Act.

Article 62(c) of the UP Stamp Act reads as follows:

“62. Transfer (whether with or without consideration) – … (c) of any interest secured by a bond, mortgagedeed or policy of insurance--”

In view of the above, transfer of any interest secured by a mortgage deed, which is covered under Article 62(c), would be excluded from the meaning of conveyance and would be chargeable to stamp duty under Article 62.

In this regard it may be pertinent to refer to the definitions of ‘bond’ and ‘mortgage deed’ under the UP Stamp Act, which is as follows:

“" Bond " includes

(a) any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;

(b) any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and

(c) any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another

“" Mortgage-deed ". — "mortgage-deed" includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of another, a right over or in respect of specified property;”

In view of the above, where a debt secured by a bond or a mortgage deed is assigned under a deed of assignment, the stamp duty payable on such deed of assignment will be under Article 62(c) of the UP Stamp Act or corresponding provisions of the Stamp Act of other States.

However, in cases of unsecured loans or loans secured by an equitable mortgage (where there is no mortgage deed), the deed of assignment would attract ad valorem stamp duty chargeable on conveyance, since the same will not get covered under Article 62(c) or similar provisions in other states.

The market practice until now has been to stamp the deed of assignment of debt under the relevant article for Conveyance in the applicable Stamp Act. In fact, in States such as Maharashtra, the State Government has issued notifications for reduction of stamp duty on a deed of assignment under the article for Conveyance.

The judgment passed by the Allahabad High Court in the Kotak case may prove to be a welcome step in reducing the incidence of stamp duty on debt assignment transactions. However, it would need to be seen whether in other States a similar view is taken by stamp duty authorities.

This update has been prepared by Aastha (Partner), Debopam Dutta (Managing Associate) and Abhay Jain (Associate).

1 Notification No. F4(3)FD/Tax/2017-110 dated March 8, 2017 issued by Finance Department (Tax Division) Government Of Rajasthan.

2 Notification No.Mudrank-2002/875/C.R.173-M-1 dated May 6, 2002 issued by Revenue & Forests Department, Government of Maharashtra.

3 Reference Against MISC. Acts. No. 1 of 2016, order dated February 9, 2018.

4 Bank of Upper India Ltd. (in liquidation) v. Fanny Skinner and Ors., AIR 1929 All 161. See also Prahlad Dalsukhrai and Ors. v. Maganlal Muljibhai Tewar, AIR 1952 Bom 454 and Harihar Pandey v. Vindhayachal Rai and Ors., AIR 1949 Pat 170.

Our Offices

11, 1st Floor, Free Press House 215, Nariman Point Mumbai – 400021

+91 22 67362222

7A, 7th Floor, Tower C, Max House, Okhla Industrial Area, Phase 3, New Delhi – 110020

+91 11 6904 4200

68 Nandidurga Road Jayamahal Extension Bengaluru – 560046

+91 80 46462300

Binoy Bhavan 3rd Floor, 27B Camac Street Kolkata – 700016

+91 33 40650155/56

The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:

a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;

b) you are desirous of obtaining further information about us on your own accord and for your use;

c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;

d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and

e) in cases where the user has any legal issues, the user must seek independent legal advice.

No separate Stamp Duty is required under the Bombay Stamp Act, 1958 on Power of Attorney attached with the deed of loan assignment to an Asset Reconstruction Company (ARC) – Asset Reconstruction Co. (India) Ltd. Vs. Chief Controlling Revenue Authority – Supreme Court

Hon’ble Supreme Court set aside an order of Gujarat High Court holding that what was presented for registration by the appellant was a single document namely an “Assignment Agreement”. What was contained in Schedule 3 to the Assignment Agreement was the format of an irrevocable PoA. The High Court overlooked the fact that there was no independent instrument of PoA and that in any case, the power of sale of a secured asset flowed out of the provisions of the Securitisation Act, 2002 and not out of an independent instrument of PoA. In the case on hand, the consideration paid by the appellant to OBC, was for the purpose of acquisition of the financial assets, in respect of a particular borrower. The draft of the PoA contained in Schedule 3 of the deed of assignment was only incidental to the deed of assignment.

In case you've already logged in, click here to know why you're not able to access this content.

Share your love:

Related posts, whether the sarfaesi act, 2002 supersedes the provision of the companies act, 1956 – alchemist asset reconstn. co. ltd. vs. coventry coil-o-matric har. ltd. & ors. – supreme court.

Login with GoogleOR Username Password Remember…

Read Post »

Whether when the Debt Recovery Tribunal(DRT) under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 exercises his power under section 19(18)(e) and appoints a Commissioner for preparation of an inventory of the properties of the defendants, whether prior leave of the Company Judge under the provisions of Companies Act is necessary, since the Company in question is under liquidation and a provisional liquidator has been appointed – State Bank of Hyderabad Vs. Pennar Paterson Ltd. & Anr. – Supreme Court

Sadashiv prasad singh vs. harendar singh & ors. – supreme court, guarantor cannot but be stated to be a strict liability & even if the principal debtor is discharged from his liability unless such discharge is through the act of the creditor without consent of the surety/guarantor, the creditor’s right of action against the surety is preserved-industrial finance corporation of india ltd. vs. thletdc.an&naonrosr.e spinning & weaving mills -supreme court.

Either type keywords in “Search here” bar or follow below instructions:

• Step-I : If you have IBC Laws Case Citation, selection in “Case Citation” otherwise select the query subject using “Case Subject” or select “Section wise Cases” or any other parameter(s) from drop-down.
• Step-II: Scroll down, the function will list all relevant case laws.
• Step-III : To filter more, select Tribunal/Court/Bench etc.

Bookmark IP Tool  or remember this link:   https://ibclaw.in/ibc-case-laws/   for future reference. For YouTube Guide, Click here .

• Member can add new topic in a Forum or Sub-Forum and also can reply existing topic(s).
• Member can subscribe a specific Topic or specific Forum/sub-forum or can subscribe all forum, in which they will receive email on new updates/reply on such topic/forum. This is also available free of cost.
• All Topics are categorised in Forums and Sub-Forums which is helpful to identify the each topic in separate category for existing as well as new visitors and can find it in easy way.
• We have nos. of Whatsapp Groups but unable to maintain trailing of discussed topics for the time being. This Forum will help to create such trailing.
• Member can see recently activities in Activity Section.
• We minimised complexity in designing to make it simple for our visitors.

You feedback is highly appreciated and help us to motivate our team. Feedback here.

IBC Commentary Index(Clickable)