The Bombay Stamp Act, 1958 comes into force on 16th February, 1959 and is applicable in the State of Maharashtra. This Act is intended to levy Stamp duty on certain types of documents executed in the State or brought from outside for acting upon the same in the State. The various instruments/documents are broadly covered under different 62 articles listed in Schedule-I appended to the Act. The rates at which stamp duty is levied on these documents are mentioned in Schedule �I. The Bombay Stamp Act, levies Stamp duty on documents/instruments by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. The stamp duty is payable on instrument and not on the transactions.
It is a type of tax which is paid for the transaction performed by way of document or instrument under the provisions of Bombay Stamp Act, 1958 and Indian Stamp Act, 1899.
It is payable on instruments and not on transactions. The definition of the term instrument is very wide.
Broadly the 62 articles of Schedule I are grouped in three categories.
i) Articles whose amount of Stamp duty is fixed irrespective of the value mentioned in the document / instrument. ( Viz. Administration Bond, Adoption deed, Affidavit, Divorce, Appointment in execution of power , Apprenticeship deed, Article of clerkship, Award, Cancellation deed, Charter party, Duplicate, Copy of Extracts, Entry of Memorandum of Marriage, Indemnity Bond, Letter of license, Memorandum of Association of a company, Notarial Act, Power of attorney, etc.)
Category ii) Articles where depending upon the value mentioned in the document, the amount of stamp duty is varied. (Viz. Agreement relating to deposit of title deeds, pawn, pledge or hypothecation, Clearance List, Lease , Article of association, Mortgage deed, Security Bond, etc.)
Category iii) Articles which attracts Stamp duty on the consideration mentioned in the document or True Market Value, whichever is higher. ( Viz. Conveyance, Agreement for sale, Gift, Exchange,Partnership Deed,Partition, Development Agreement, Transfer, Trust, etc.)
For category I and II types of instruments the Stamp duty payable can be ascertained by referring to the Schedule I; but to ascertain the Stamp duty on the instruments mentioned in Category III, the expertise in valuation is required. The True Market Value is determined as per the provision of the Bombay Stamp ( Determination of True market value of the property ) Rules, 1995.
The Section 17 & 18 of the Act states the time of payment stamp duty. Generally all the instruments executed in the state shall be stamped before or at the time of execution or immediately thereafter or on the next working day following the day of execution. Similarly, the instruments which is executed out of the state and within three months from its receipt in the state, shall be stamped.
Stamp Duty can be paid by
1. Using Stamp paper
2. Using adhesive stamps
As per the provisions of Section 30 the onus of payment of Stamp duty in the absence of an agreement to the contrary, shall be borne by the executing in the manner provided their with respect of certain kinds of documents viz. Mortgage deed, release, security bond, settlement, bond etc. in the case of conveyance, the grantee and lease the lessee shall pay the stamp duty in the case of exchange of property, both the parties in equal share shall pay stamp duty. In case of partition, the parties thereto in proportion to their respective shares should pay stamp duty.
The Document which is chargeable with Stamp duty can be prepared on the non-judicial Stamp paper of appropriate value. Unexecuted document can be got franked with special adhesive Stamps by Franking Machine intended for stamping such documents, by tendering required amount in the office of collector of Stamps whereever this facility is available. When documents is lodged for adjudication, on receiving intimation as to the amount of Stamp duty payable by tendering appropriate amount equal to the amount of Stamp duty and penalty if any, the Collector of Stamp shall certify the document as to the payment of proper duty.