The Bombay Stamp Act applies to the entire State of Maharashtra. All the instruments specified in the Schedule to the Act are covered under this Act.
1. IMPORTANT DEFINITIONS
1.1 “Conveyance” has been defined to include:
1. a conveyance on sale,
2. every instrument,
3. every decree or final order of any Civil Court,
4. every order made by the High Court u/s. 394 of the Companies Act, 1956 in respect of amalgamation of companies;
The Explanation to the definition provides that any instrument by which one co-owner transfers his property to another co-owner would be deemed to be a conveyance provided that it is not an instrument of partition.
1.2 “Instrument of gift” has been defined to include, in case of an oral gift any instrument recording its making or acceptance, whether by way of declaration or otherwise.
1.3 “Instrument of partition” means any instrument whereby co-owners of any property divide or agree to divide such property and includes :
1. a final order for effecting a partition passed by any revenue authority or any civil court,
2. an award by an arbitration directing a partition, and
3. when any partition is effected without executing any such instrument, any instrument or instruments signed by the co-owners and recording, whether by way of declaration of such partition or otherwise, the terms of such partition amongst the co-owners.
The expression ‘co-owners’ includes all kinds of co-ownership such as joint tenancy, tenancy in common, coparcenary, membership of HUF, etc. and the partnership.
1.4 “Immovable Property” includes land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth. The two leading decisions on this definition are those of the Supreme Court in the case of Sirpur Paper Mills (1998) 1 SCC 400 and the case of Duncan’s Industries (2000) 1 SCC 633.
2. PAYMENT
2.1 It can be paid by way of adhesive or impressed stamps on the instruments.
2.2 The stamp papers must be in the name of one of the parties to the transaction. They cannot be in the name of the Chartered Accountant or Lawyer of the parties.
2.3 The date of issue of the stamp paper must not be more than 6 months older than the date of the execution of the instrument.
2.4 Liability to pay Stamp Duty will be on the person who has agreed to pay the same. The Act also provides that in the case of a Conveyance, duty is to be paid by a buyer and by the lessee in case of a lease. In cases of Bonds, Release, Settlement, it is to be paid by the person making or drawing the instrument. In case of exchange, it is to be paid by the parties in equal shares and in case of partition, by the parties in proportion to their respective shares. In all other cases, it is to be paid by the person executing the instrument.
2.5 Stamp duty is payable at rates specified in Schedule I. Depending upon the Instrument, it may be based upon nature of instrument which is either ad valorem.
The stamp office determines the market value of the property by referring to an Annual Statement of Rates (commonly known as Stamp Duty Ready Reckoner) which gives the market values of various immovable properties in Mumbai. The Reckoner divides the immovable property into various categories such as developed land, undeveloped land, residential units, industrial units/office, shops, etc., and fixes their market value accordingly.
2.6 Any person can apply to the Collector of Stamps for adjudication of the stamp duty payable on the instrument.
3. UNDER VALUED DOCUMENT
3.1 Under section 34 of the Act, any instrument which is inadequately/not stamped, then it shall be inadmissible in evidence for any purpose, e.g., in a Civil Court. Such instruments can be admissible in evidence on payment of the requisite amount of duty and a penalty @ 2% per month on the deficient amount of duty calculated from the date of execution. However, the maximum penalty cannot exceed twice the amount of deficiency in duty.
3.2 Further, any public officer can impound such improperly stamped instruments if it comes to his notice. Such impounded instruments must be sent to the Collector who would then determine the amount of duty and penalty, if any, payable on the same. Any party to an instrument can also suo motu submit an instrument for adjudication by the Collector u/s. 31 on payment of Rs. 100.
3.3 A person can be punished with rigorous imprisonment for up to 6 months (not less than 1 month) and with fine up to Rs. 5,000/-, if it is proved that the instrument was undervalued or short payment of duty was made with intention to evade duty.
SCHEDULE 1
RATES ON VARIOUS INSTRUMENTS AS PER BOMBAY STAMP ACT, 1958
MAHARASHTRA
| Commercial | Residential |
| (i) Greater Bombay |
| (ii) Thane, Pune, Nagpur, Navi Mumbai |
| (iii) Other Municipal Corporation |
| Rs. 2,000 | Rs. 200 |
| Rs. 1,000 | Rs. 100 |
| Rs. 400 | Rs. 50 |