India: Stamp Duty: A Brief Overview In The State Of Maharashtra

Last Updated: 20 October 2010
Article by Renu Parekh

An infrastructure project involves, besides the actual project documents, finance documents, security documents etc. Dealing with land plays a critical role in most projects. The role of a legal counsel includes preparing, executing, vetting of these documents and structuring a wholesome transaction. As the costs of these projects are enormous so are the resultant implications on stamp duty. Since, the ISA, BSA (both defined later) and other stamp acts have diverse classifications of instruments under which each of them are covered, it is necessary for legal counsel to understand the background and nature of the stamp duty and its effects/impact on the entire project.

Stamp duty is a kind of tax, just like sales/income tax etc. and justifiably its basic purpose is to raise revenue for the Government. Thus, like any other tax, stamp duty must be paid in full and on time to the Government, with delays attracting penalties. Broadly speaking, stamp duty is levied on an instrument (and not on a transaction); stamp duty is payable on property (whether immovable/ movable or tangible/intangible) either on a fixed basis or on the basis of the consideration mentioned in the instrument as the case may be. In case of immovable property, there is an additional concept of valuation of the property, which is also taken into account while determining the stamp duty payable.

In India, the Indian Stamp Act, 1899 (ISA) is the Central Legislation while the States have their own local stamp acts to deal with issues arising within that particular State. The Bombay Stamp Act, 1958 which came into force on 16th February 1969 (BSA) is the law for stamp duty within the State of Maharashtra. Constitution of India empowers both the Parliament and the State Legislature to make provisions and laws for stamp duty within its ambit. Accordingly, ISA covers certain documents as specified therein. An instrument is defined under BSA to include every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded, but does not include a bill of exchange, cheque, promissory note, etc. These documents that have been excluded, as aforesaid are governed under the ISA. The word 'document' is neither defined either in ISA nor the BSA and one needs to rely upon the Evidence Act, 1872 and The General Clauses Act, 1897 for its interpretation. With the enactment of Information Technology Act, 2000 the term 'document' also includes any electronic record as defined therein. Popularly, the words instruments and documents are used interchangeably.

Often the phrase 'duly stamped' is used in relation to an instrument. It connotes that an instrument bears an adhesive/impressed stamp of not less than the proper amount. Stamp papers can be validly purchased from the State 'authorized vendors' and in cases of high denomination, stamp duty can also be paid by way of franking the instrument again through the State authorized channels. A duly stamped document can be admitted as evidence in any lawful transaction or in a court of law with few exceptions under the criminal proceedings.

In Maharashtra, prior to 1st May, 1994 stamp papers could be purchased in the names of advocates or in any other name. However, thereafter stamp papers are to be purchased in the name of one of the parties to the instrument. Furthermore, the validity of stamp papers are restricted to a period of 6 months and if the stamp paper is used thereafter then it is deemed that the document is executed on ordinary paper without a stamp.

If an instrument falls within several descriptions in Schedule I of the BSA with different rates of duties, then the instrument is chargeable with the highest of the duty prescribed. In addition, BSA also prescribes methodology for adjudication (proper valuation), refund of duties, grievance processes and convictions etc. The Collector is normally authorized or vested with the power of adjudication. If a document is not stamped or adequately stamped, it is likely to be impounded.

Circumventing the instruments classifications with a view to avoid or reduce duties has long been historically established. In order to bring this circumvention/avoidance within the taxing network, the classifications of instruments, rates etc. are revised periodically. The Government is to promote certain industries, remit either in full or in part the stamp duty payable by such identified industries.

The Department of Registration and Stamps, Government of Maharashtra, the 2nd highest revenue earning department, had a vast presence with over 400 offices managed by 2500 employees and generates various job opportunities. It undertook an ambitious IT project called SARITA (Stamps and Registration Information Technology Based Administration) whereby all the sub registrar/district level/division level offices as well as the Head Quarters at Pune have been computerized and automated. SARITA has been operational since January 2001 and has registered more than 2 million documents with the estimated revenues exceeding Rs. 5000 crores.

The challenge for legal counsel in structuring documents arises to make it 'stamp duty friendly' with the different slabs and classifications available. Care needs to be taken as the documents attract duty on arrival within a State and with eager regulators around, it's best to be conformist in approach.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.