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Preeti Wadhawan (CS & Legal Manager)     05 January 2009

Stamp Duty payable on execution of agreements

Hi Friends,

I am a new member to this portal and found it very useful and interesting. I have been trying to find an answer to a question for quite some time but i am getting different answers from different lawyers so i thought this may be a good platform to raise the question.

There are number of agreements entered into by the company in their day to day running like transport agreement, housekeeping agreement, recuritment agreement with a manpower services company, security agreement. The Indian Stamp Act do not specifically provide for payment of stamp duty on such agreements. I would like to know is there a requirement to have these agreements on a stamp paper? If so, what is the value of stamp paper to be used?

Thanks in advance for your reply.

Regards,

Preeti Wadhawan



Learning

 18 Replies

AEJAZ AHMED (Legal Consultant/Lawyer)     05 January 2009

MR. WADHAWAN,



Instruments chargeable to stamp duty

 

Instrument includes every document by which any right or liability, is, or purported to be created, transferred, limited, extended, extinguished or recorded [section 2(17) of Indian Stamp Act]. Any instrument mentioned in Schedule I to Indian Stamp Act is chargeable to duty as prescribed in the schedule [section 3]. The list includes all usual instruments like affidavit, lease, memorandum and articles of company, bill of exchange, bond, mortgage, conveyance, receipt, debenture, share, insurance policy, partnership deed, proxy, shares etc. Thus, if an instrument is not listed in the schedule, no stamp duty is payable. ‘Instrument’ does not include ordinary letters. Similarly, an unsigned draft of an agreement is not an ‘instrument’

 


Manish Singh (Advocate)     05 January 2009

dear ms wadhwan,


all the agreements which are not specifically covered under any entry under the stam act/ duty are made on a stamp paer having value under the head agreement. in delhi for general agreements, the value of stamp paper shpould be rs. 50/-.


agreements must be drafted on stapm paper.

AEJAZ AHMED (Legal Consultant/Lawyer)     05 January 2009

Mr. Wadhawan,


Its a general trend in India, that each and every transaction, either covered under Schedule - I of the Act Or not listed in the same is executing on Stamp Papers, and Generally we use the Papers with denomination of Rs. 10/20/50 /100 .


But, it is very clear from the Act, that it is not necessary for the instrument not listed in schedule.

RAKHI BUDHIRAJA ADVOCATE (LAWYER AT BUDHIRAJA & ASSOCIATES SUPREME COURT OF INDIA)     06 January 2009

Md. Aejaz Ahmad is absolutely right.

Anup Kumar (business)     06 January 2009

Simple ans. to your que is:


The value of stamp paper to be used for an agreement depends on rate of stamp duty applicable in particular state. As the State Govt. has power to decide stamp duty applicable in its state.


For eg. in Delhi stamp duty on agreements not specifically provided for is Rs. 50/-. In state of U.P it is Rs.100/- .


Plz. refer to rates of stamp duty in your state.

Preeti Wadhawan (CS & Legal Manager)     06 January 2009

Thanks to all my learned friends for the reply.


Anup, where can i find the fact that in delhi, the stamp duty on agreements is Rs 50/-. And specifically for gurgaon


Regards,


Preeti

Nu.Delhi.Law.Fora. (Advocate-on-Record Supreme Court of India)     06 January 2009

RATES OF STAMP DUTY APPLICABLE TO DELHI


 

















































































































































































































































































































































































































































































































































































































































































































































































































































SCHEDULE I-A



Description of Instrument



Proper Stamp-duty



1.



ACKNOWLEDGEMENT of a debt exceeding twenty rupees in amount or value, written or signed by, or on behalf, a debtor in order to supply evidence of such debt in any book (other than a banker's pass book) or on a separate piece of paper when such book or paper is left in the creditor's possession:



One rupee


 

PROVIDED that such acknowledgement does not contain any promise to pay the debt or any stipulation to pay interest or to deliver any goods or other property.


 

2.



ADMINISTRATION BOND, including a bond given under section 6 of the Government Savings Bank Act, 1873, or sections 291, 375 and 376 of the Indian Succession Act, 1925


 
 

(a) where the amount does not exceed Rs. 1,000



The same duty as a Bond (No. 15) for such amount



 



(b) in any other case



One hundred rupees



3.



ADOPTION DEED, that is to say, any instrument (other than a Will), recording an adoption, or conferring or purporting to confer an authority to adopt.



Fifty rupees


 

ADVOCATE see Entry as an Advocate(No. 30)


 

4.



AFFIDAVIT, including an affirmation or declaration in the case of persons by law allowed to affirm or declare instead of swearing.



Ten rupees



 



Exemption



 


 

Affidavit or declaration in writing when made--


 
 

(a) as a condition of enrolment under the Army Act, 1950; or Air Force Act, 1950;


 
 

(b) for the immediate purpose of being filed or used in any court or before the officer of any court; or


 
 

(c) for the sole purpose of enabling any person to receive any pension or charitable allowance.


 

5.



AGREEMENT OR MEMORANDUM OF AN AGREEMENT


 
 

(a) if relating to the sale of a bill of exchange;



One rupee for every Rs. 10,000 or part thereof


 

(b) if relating to the sale of a government security or share in an incorporated company or other body corporate;



One rupee for every Rs. 10,000 or part thereof of the value of the security or share subject to a maximum of Rs. 1,000.


 

(c) if not otherwise provided for;



Fifty rupees


 

Exemption


 
 

Agreement or memorandum of agreement--


 
 

(a) for or relating to the sale of goods or merchandise exclusively, not being a Note or Memorandum chargeable under No.43;


 
 

(b) made in the form of tenders to the Central Government for or relating to any loan.


 

6.



AGREEMENT TO LEASE, See lease (No. 35) Agreement relating to Deposit of Title Deeds, Pawn or Pledge that is to say, any instrument evidencing an agreement relating to--


 
 

(1) the deposit of title-deeds or instruments constituting or being evidence of the title to any property whatever (other than a marketable security), or


 

 



(2) the pawn or pledge of moveable property, where such deposit, pawn or pledge has been made by way of security for the repayment of money advanced or to be advanced by way of loan or an existing or future debt--



 


 

(a) if such loan or debt is repayable on demand or more than three months from the date of instrument evidencing the agreement



0.5 per cent of the amount secured by such deed subject to a maximum of fifty thousand rupees


 

(b) If such loan or debt is repayable in not more than three months from the date of such instrument.



Half the duty payable under sub-clause (a).


 

Exemption


 
 

Instrument of pawn or pledge of goods if unattested


 

7.



APPOINTMENT IN EXECUTION OF A POWER, whether of trustees or of property, movable or, immovable, where made by any writing not being a Will



One hundred rupees



8.



APPRAISEMENT OR VALUATION, made otherwise than under an order of the court in the course of a suit;--


 
 

(a) where the amount does not exceed Rs.1,000



The same duty as a Bottomry Bond (No. 16) for such amount


 

(b) in any other case



Fifty rupees.


 

Exemptions


 
 

(a) Appraisement or valuation made for the information of one party only, and not being in any manner obligatory between parties either by agreement or operation of law.


 
 

(b) Appraisement of crops for the purpose of ascertaining the amount to be given to a landlord as rent


 

9.



APPRENTICESHIP DEED, including every writing relating to the service or tuition of any apprentice, clerk or servant placed with any master to learn any profession, trade or employment, not being articles of clerkship (No. 11)



Ten rupees



 



Exemption



 



 



Instrument of apprenticeship executed by a Magistrate under the Apprentices Act, 1950, or by which a person is apprenticed by, or at the charge of, any public charity.


 

10.



ARTICLES OF ASSOCIATION OF A COMPANY


 
 

(a) when the authorised capital of the


 

Exemption


 
 

Articles of any Association not formed for profit and registered under section 25 of the Companies Act, 1956


 
 

Memorandum of Association of a Company (No. 39)


 

11



ARTICLES OF CLERKSHIP or contract where by any person first becomes bound to serve as a clerk in order to his admission as an attorney in any High Court



Four hundred rupees


 

ASSIGNMENT--See conveyance (No. 23), Transfer No. 62 and Transfer of Lease (No. 63), as the case may be


 
 

ATTORNEY--See entry as an Attorney (No. 30), and power of Attorney (No. 48)


 
 

AUTHORITY TO ADOPT--See Adoption Deed (No. 3)


 

12.



AWARD, that is to say, any decision in writing by an arbitrator or umpire, not being an award directing a partition on a reference made otherwise than by an order of the court in the course of a suit--


 
 

(a) where the amount or value of the property to which the award relates as set forth in such award, does not exceed Rs. 1,000;



The same duty as a Bond (No. 15) for such amount


 

(b) if it exceeds Rs. 1,000 but does not exceed Rs. 5,000 and for every additional Rs. 1,000 or part thereof in excess of Rs. 5,000



One rupee for every one thousand rupees or part thereof of the value of the property to which the award relates



13.



BILL OF EXCHANGE, as defined by section 2(2) not being a BOND, bank note or currency note:--



 


 

(a) Where payable otherwise than on demand--


 
 

(i) where payable in not more than three months after date or sight--


 
 

if the amount of the bill or note does not exceed Rs. 500



One rupee twenty five paise


 

if it exceeds Rs. 500 but does not exceed Rs. 1,000



Two rupees fifty paise


 

and for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000



Two rupees fifty paise


 

(ii) where payable in more than three months but not more than six months after date or sight--


 
 

if the amount of the bill or note does not exceed Rs. 500



Two rupees fifty paise


 

if it exceeds Rs. 500 but does not exceed Rs.1,000



Five rupees


 

and for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000



Five rupees


 

(iii) where payable in more than six months but not more than nine months after date or sight--


 
 

if the amount of the bill or note does not exceed Rs. 500



Three rupees seventy five paise


 

if it exceeds Rs. 500 but does not exceed Rs. 1,000



Seven rupees seventy five paise


 

and for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000



Seven rupees fifty paise


 

(iv) where payable in more than nine months but not more than one year after date or sight--


 
 

if the amount of the bill or note does not exceed Rs. 500



Five rupees


 

if it exceeds Rs. 500 but does not exceed Rs.1,000



Ten rupees



 



and for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000



Ten rupees


 

(v) where payable in more than one year after date or sight--


 
 

if the amount of the bill or note does not exceed Rs. 500



Ten rupees.


 

if it exceeds Rs. 500 but does not exceed Rs.1,000



Twenty rupees


 

and for every additional Rs. 1,000 or part thereof in excess of Rs. 1,000



Twenty rupees



14.



BILL OF LADING (including a through bill of lading)



Two rupees



NB : If a bill of lading is drawn in parts, the proper stamp therefor must be borne by each one of the set


 

 



Exemptions


 
 

(a) Bill of lading when the goods therein described are received at a place within the limits of any port as defined under the Indian Ports Act, 1889, and are to be


 
 

delivered at another place within the limits of the same port.


 
 

(b) Bill of lading when executed out of India,


 

15.



BOND as defined by section 2(5), not being a DEBENTURE (No. 27), and not being otherwise provided for by this Act, or by the Court Fees Act, 1870.



2% and 0.5% on bond issued by the local authority


 

See Administration Bond (No. 2) Bottomry Bond (No. 16), Customs Bond (No. 26), Indemnity Bond (No. 34) Respondentia Bond (No. 56), Security Bond (No. 57).


 
 

Exemption


 
 

Bond when executed by any person for the purpose of guaranteeing that the local income derived from the private subscription to a charitable dispensary or hospital or to any other object of public utility, shall not be less than a specified sum per mensem.


 

16.



BOTTOMRY BOND, that is to say, any instrument whereby the master of a seagoing ship borrows on a security of the ship to enable him to preserve the ship or prosecute her voyage



The same duty as a Bond No. 15 for the same amount



17.



CANCELLATION--Instrument of (including any instrument by which any instrument previously executed is cancelled), if attested and not otherwise provided for.



One hundred rupees


 

See also Release (No. 55), Revocation of Settlement (No. 58B), Surrender of Lease (No. 61), Revocation of Trust (No. 64B).


 

18.



CERTIFICATE OF SALE (in respect of each property put up as a separate lot and sold), conveyance duty as to the purchaser of any property sold by public auction by a civil of revenue court, or Collector or other revenue officer



The same duty as conveyance (No. 23), for a consideration equal to the amount of the purchase money only.



19.



CERTIFICATE OR OTHER DOCUMENT, evidencing the right or title of the holder thereof, or any other person, either to any shares, scrip or stock in or of any incorporated company or other body corporate or to become proprietor of shares, scrip or stock in or of any such company or body. See also LETTER OF ALLOTMENT OFSHARES (No. 36)



One rupee for every one thousand or a part thereof of the value of the shares, scrip or stock



20.



CHARTER PARTY, that is to say, any instrument (except an agreement for the hire of a tug steamer), whereby a vessel or some specified principal part thereof is let for the specified purposes of the charter, whether it includes a penalty clause or not



Fifty rupees



20A.



CHIT AGREEMENT, that is an agreement relating to a chit as defined in clause (2) of section 2 of the Madras Chit Funds Act, 1961, as extended to the Union Territory of Delhi1, if either such agreement is executed or the chit is conducted in the Union Territory of Delhi1



Five rupees



22.



COMPOSITION-DEED, that is to say, any instrument executed by a debtor whereby he conveys his property for the benefit of his creditors, or whereby payment of a composition or dividend on their debts is secured to the creditors or whereby provision is made for the continuance of the debtor's business under the supervision of inspectors or under letters of licence for the benefit of his creditors



One hundred rupees



 



CONVEYANCE as defined by section 2(10) not being a Transfer charged or^ exempted under No. 62--



2[5%]. of the consideration amount set forth in the instrument


 

Exemption


 
 

Assignment of copyright under the Copyright Act, 1957, section 18


 
 

CO-PARTNERSHIP-DEED-See Partnership (No. 46)


 

24.



COPY OR EXTRACT, certified to be true copy or extract, by or by order of any public officer and not chargeable under the law for the time being in force relating to court fees--


 
 

(i) if the original was not chargeable with duty or if the duty with which it was chargeable does not exceed two rupees



Ten rupees


 

(ii) in any other case not falling within the provisions of section 6A



Ten rupees


 

Exemptions


 
 

(a) Copy of any paper which a public officer is expressly required by law to make or furnish for record in any public office or for any public purpose.


 
 

(c) Copy of, or extract from, any register relating to births, baptisms, namings, dedications, marriages, divorces, deaths or burials.


 

25.



COUNTERPART OR DUPLICATE of any instrument chargeable with duty in respect of which the proper duty has been paid--


 

 



(a) the duty with which the original instrument is chargeable does not exceed two rupees



Ten rupees


 

(b) in any other case not falling within the provisions of section 6A.



Ten rupees


 

Exemption


 
 

Counterpart of any lease granted to a cultivator, when such lease is exempted from duty


 

26



CUSTOMS-BOND


 
 

(a) where the amount does not exceed Rs. 1,000



The same duty as a Bond (No. 15) for such amount


 

(b) in any other case



One hundred rupees



 



DEBENTURE (whether a mortgage debenture or not), being a marketable security transferable--


 
 

(a) by endorsement or by a separate instrument of transfer


 
 

where the amount or value does not exceed Rs. 10



Twenty paise


 

where it exceeds Rs. 10 and does not. exceed Rs. 50



Forty paise


 

where it exceeds Rs. 50 but does not exceed Rs. 100



Seventyfive paise


 

where it exceeds Rs 100 but does not exceed Rs. 200



One rupee fifty paise


 

where it exceeds Rs. 200 but does not exceed Rs. 300;



Two rupees twentyfive paise


 

where it exceeds Rs. 300 but does not exceed Rs. 400;



Three rupees


 

where it exceeds Rs. 400 but does not exceed Rs: 500;



Three rupees seventyfive paise


 

where it exceeds Rs. 500 but does not exceed Rs. 600;



Four rupees fifty paise


 

where it exceeds Rs. 600 but does not exceed Rs. 700;



Five rupees twentyfive paise


 

where it exceeds Rs. 700 but does not exceed Rs. 800;



Six rupees



 



where it exceeds Rs. 800 but does not exceed Rs. 900;



Six rupees seventyfive paise


 

where it exceeds Rs. 900 but does not exceed Rs. 1,000;



Seven rupees fifty paise


 

and for every Rs. 500 or part thereof in excess of Rs. 1,000.



Three rupees seventyfive paise


 

(b) by delivery



 


 

where the amount or value of the consideration for such debenture as set forth therein does not exceed Rs. 50



Seventyfive paise


 

where it exceeds Rs. 50 but does not exceed Rs. 100



One rupee fifty paise


 

where it exceeds Rs 100 but does not exceed Rs. 200



Three rupee


 

where it exceeds Rs. 200 but does not exceed Rs. 300



Four rupees fifty paise


 

where it exceeds Rs. 300 but does not exceed Rs. 400



Six rupees


 

where it exceeds Rs. 400 but does not exceed Rs. 500



Seven rupees fifty paise


 

where it exceeds Rs. 500 but does not exceed Rs. 600



Nine rupees


 

where it exceeds Rs. 600 but does not exceed Rs. 700



Ten rupees fifty paise


 

where it exceeds Rs. 700 but does not exceed Rs. 800



Twelve rupees


 

where it exceeds Rs. 800 but does not exceed Rs. 900



Thirteen rupees fifty paise


 

where it exceeds Rs. 900 but does not exceed Rs. 1,000



Fifteen rupees


 

and for every Rs. 500 or part thereof in excess of Rs. 1,000



Seven rupees fifty paise


 

Explanation : The term "Debenture" includes any interest coupons attached thereto, but the amount of such coupons shall not be included in estimating the duty.


 

 



Exemption



 



 



A debenture issued by an incorporated company or other body corporate in terms of a registered mortgage-deed, duly stamped in respect of the full amount of debentures to be issued thereunder, whereby the company or body borrowing makes over, in whole or in part, their property to trustees for the benefit of the debenture-holders:


 
 

PROVIDED that the debentures so issued are expressed to be issued in terms of the said mortgage deed.


 

28.



DELIVERY ORDER IN RESPECT OF GOODS that is to say, any instrument entitling any person therein named, or his assigns or the holder thereof, to the delivery of any goods laying in any dock or port, or in any warehouse in which goods are stored or deposited on rent or hire, or upon any wharf, such instrument being signed by or on behalf of the owner of such goods, upon the sale or transfer of the property therein, when such goods exceed twenty rupees in value.



One rupee


 

DEPOSIT OF TITLE DEEDS--See AGREEMENT RELATING TO DEPOSIT OF TITLE DEEDS, PAWN OR PLEDGE (No. 6)


 
 

DISSOLUTION OF PARTNERSHIP--See PARTNERSHIP (No. 46).


 

29.



DIVORCE Instrument of--that is to say any instrument by which any person effects the dissolution of his marriage



One hundred rupees


 

DUPLICATE see Counterpart (No. 25)


 

30.



ENTRY AS AN ADVOCATE, VAKIL OR ATTORNEY ON THE ROLL OF THE HIGH COURT (Under the Indian Bar Councils Act, 1926, or in exercise of powers conferred on such court by Letters Patent or by the Legal Practitioners Act, 1884)--


 
 

(a) in the case of an advocate or vakil



Five hundred rupees


 

(b) in the case of an Attorney



Five hundred rupees



 



Exemption



 



 



Entry of an Advocate, Vakil or Attorney on the roll of the High Court, when he has previously been enrolled in any other High Court



 



31.



EXCHANGE OF PROPERTY, instrument of--



The same duty as conveyance (No. 23) as levied by this Act for a consideration equal to the greatest value of the property as set forth in such instrument.


 

EXTRACT--See Copy (No. 24}


 

32.



FURTHER CHARGE, Instrument of, that is to say, any instrument imposing a further charge on mortgage property--


 
 

(a) when the original mortgage is one of the description referred to in clause (a) of Article No. 40 that is, with possession;



The same as a conveyance (No. 23) for the value equal to the amount of further charge secured by such instrument.


 

(b) when such mortgage is one of the description referred to in clause (b) of Article No. 40 (that is, without possession)--


 
 

(i) if at the time of execution of the instrument of further charge, possession of the property is given or agreed to be given under such instrument;



The same as conveyance (No. 23) for a value equal to the total amount of the charge (including the original mortgage and any further charge already made) less the duty already paid on such original mortgage and further charge.


 

(ii) if possession is not so given.



The same duty as a Bond (No. 15) for the amount of the further charge by such instrument, subject to a maximum of rupees two lakhs.



33.



GIFT--Instrument of, not being a settlement (No. 58), or Will or Transfer (No. 62)



The same duty as conveyance (No. 23) as the value of the property.


 

HIRING AGREEMENT or agreement for service--(see Agreement (No. 5).


 

34.



INDEMNITY BOND



The same duty as Security Bond (No. 57) for the same amount.


 

INSPECTORSHIP-DEED--See Composition Deed (No. 22)


 


 


1. Now National Capital Territory of Delhi.


2. (i) Rate of Stamp duty reduced from 8% to 5% in respect of conveyance on sale and in respect of conveyance on Agreement to sell. Duty on other instruments of conveyance shall continue to remain at 8% vide No. F. 2(3)/Fin.(E-1)/2003-04(i)/125, dt. 19-5-2003, w.e.f. 19-5-2003.


(ii) Said rate is further reduced to 3% in respect of conveyance on sale in cases of the purchase of immovable property by women vide Noti. No. F.2(3)/Fin.(E1)/2003-04(ii)/135, dt. 20-5-2003, w.e.f. 20-5-2003.

Preeti Wadhawan (CS & Legal Manager)     06 January 2009

Dear Rabin,


Thanks for the reply. I looked at the Haryana Stamp Act but found no similar entry. Can i then safely assume, that no stamp duty is payable on execution of general agreements not provided in the schedule in Haryana


Regards

Nu.Delhi.Law.Fora. (Advocate-on-Record Supreme Court of India)     06 January 2009

For Haryana, pl see relevant provisions. As far I remember, both in Delhi & in Haryana, duties applicable in all these aspect are similar. However, be advised that unless you provide as to what documents that you wish this forum lawyers to opine upon as to subjection to stamp duty according to local laws, it is difficult to provide you the specific opinion. In that respect, if you wish, you may post yor specific query to enable the forum form a definitive opinion.


Thanks & regards.


 


Rabin Majumder, Advocate & Attorney, New Delhi


nudelhilawfora@yahoo.com

Preeti Wadhawan (CS & Legal Manager)     07 January 2009

Hi Rabin,


I have seen the haryana stamp schedule but cannot find any such entry. I was looking for agreements executed by company for security, housekeeping, transport.


 


Regards

Suresh (Advocate and Solicitor)     13 January 2009

All stamp duty Acts have a schedule that provide for stamp duty payable in respect of documents. You will have to check if Gurgoan has its own stamp Act or if the Delhi stamp Act is applicable. 

Suresh (Advocate and Solicitor)     13 January 2009

All stamp duty Acts have a schedule that provide for stamp duty payable in respect of documents. You will have to check if Gurgoan has its own stamp Act or if the Delhi stamp Act is applicable. 

Suresh (Advocate and Solicitor)     13 January 2009

All stamp duty Acts have a schedule that provide for stamp duty payable in respect of documents. You will have to check if Gurgoan has its own stamp Act or if the Delhi stamp Act is applicable. 

pawan (director)     31 August 2012

Sir Delhi Builder has done on plain paper and agreement / allotement for Rs X to be paid in installement. want to know on how stamp paper value or it is o.k . kindly provide certain Ruling / ACT section .can this document be produced in court 


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