India: Stamp Duty Intricacies In India

Stamp duty is a very important factor in structuring transactions, specially with many of the states in India imposing high stamp duties on documents to shore up their revenues. A document inadequately stamped is not admissible as evidence. It is thus very important that stamp duty implications be examined upfront whilst structuring a transaction rather than just before execution as the latter approach often leads to delay and many a times may also lead to payment of excess stamp duty when it was not required. The matter is compounded by the fact that stamp duty is different in each of the states of India and there are a few states where even the local lawyers are not well versed with the stamp duty attracted by different documents. Moreover, changes to stamp duties may be announced by state governments at the time of the state budget or even otherwise. In the case of many states, the updated stamp acts/schedules may not be available. At times even the state government websites may not reflect the stamp duty incidence accurately. In the past, the practise of executants in states with high stamp duty was to execute documents in other states where incidence of stamp duty is lower. However, the stamp authorities have been getting increasingly vigilant and of late have been conducting suo-moto enquiries in suspected cases of underpayment. They have examining publicly available balance sheets and even information available on the internet to apprehend evaders.

Many states provide for levying differential stamp duty should the document first be executed in another state with lower stamp duty but brought in to the former state. At times it is only the original document that will attract differential stamp duty if it is brought into a state but many states have provided that even photocopies and scanned copies of documents brought into the state will attract differential stamp duty. Thus, stamp duty implications must be examined when documents or their photocopies are being moved from one state to another and even when documents are being transmitted by email to another state in India. One has also to be careful whilst bringing in documents executed overseas into India whether by email or physical or photocopies. Many states provide that the shortfall in stamp duty must be paid within a specified period (most commonly 3 months) of the documents being brought into the state.

The stamp laws of most states provide that when there are multiple instruments for specified transactions, duty payable only on the instrument attracting highest stamp duty needs to be paid on the principal instrument and nominal stamp duty is payable on the rest of the documents. It is found that quite often parties do not take advantage of this provision. The schedules to the stamp acts stipulate the rate at which stamp duty is attracted on an instrument. Stamp laws provide that where an instrument is so framed to come within two or more descriptions in the schedule to the stamp act,where the duties chargeable are different one need pay only the highest of such duties. In states where the stamp duty incidence is very high, it may be worthwhile to club several documents into one umbrella document and reduce the incidence of stamp duty.

When a single instrument relates to distinct matters, stamp laws require that the instrument shall be chargeable with the aggregate amount of duties with which the separate instruments each comprising of one of such distinct matters would be chargeable. One may come across instances where distinct matters may have been combined in one instrument and stamp duty has inadvertently been paid only on one instrument when it should have been paid separately for each distinct matter. This may happen in securitisation or bond transactions where a single instrument may be executed for convenience purpose in respect of distinct matters.

When the value of the instrument is indeterminate upfront like employment agreements, royalty agreements, etc, the provision in most state laws to pay a nominal stamp duty upfront can be availed of with the remaining stamp duty being paid as and when the value is ascertained.

Many of the states have now provided that instruments attracting stamp duty would also include electronic records. A common mistake that one comes across is documents being executed in State X when the address of executants and situs of subject matter is state Y. If such instrument is required to be filed with the registrar of companies in state Y, example an instrument of charge then the document would have to be uploaded electronically onto the website of the Ministry of Company Affairs. Since the concerned registrar of companies office (i.e State Y in this case) would download the documents in State Y, the electronic records are deemed to have been brought into the state where registered office is located at the time when the registrar of companies downloads the document and this may attract the stamp duty in State Y at that point of time.

If an instrument is not duly stamped the stamp authorities may levy a penalty which is generally an ad valorem rate which varies from state to state and maximum penalty could range from twice the deficient stamp duty to ten times the deficient stamp duty. Deliberate evasion of stamp duty could also attract imprisonment.

Finally, there may be situations where one stamps a document in anticipation of execution but the deal falls through and the document is not executed at all. If the stamp duty is high then most states provide for claiming a refund. There is a specified period within which such claims have to be lodged and supporting documents may have to be provided and the specified procedure strictly followed. However, the process of getting refund is slow and bureaucratic and one must be prepared for a long wait.

© 20th May, 2013. All rights reserved with Vaish Associates Advocates, 106, Peninsula Center, Dr S.S Rao Road, Parel, Mumbai 400 032. Phone: 022 4213 4101.

Specific Questions relating to this article should be addressed to the author at

The content of this article is intended to provide a general guide to the subject matter. Specialist professional advice should be sought about your specific circumstances. The views expressed in this article are solely of the author of this article.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions