At present, the Indian Stamp Act,1899 is in force
To streamline and simplify transactions of immovable properties and securities, the State government on Tuesday introduced its own stamp duty Bill in the Assembly.
The move to enact an exclusive stamp law for Tamil Nadu has been made, taking a cue from States such as Maharashtra, Gujarat, Kerala, Karnataka and Rajasthan.
At present, the Indian Stamp Act,1899 is in force in the State. Since it is an existing law with respect to one of the matters enumerated in the Concurrent List, amendments to the Act, once passed by the State legislature, have to be sent to President for assent, eventually resulting in delay in the execution of the proposed amendments. To facilitate the process of bringing into force such amendments and regulate the procedure on the levy of stamp duty by the State government, it was decided to frame an exclusive law, according to the statement of objects and reasons of the Tamil Nadu Stamp Bill, which was tabled by Commercial Taxes and Registration Minister B.V. Ramanaa.
Explaining the features of the proposed legislation, officials say the State law will provide for levy of stamp duty on all instruments falling under the State List, for example, sale or mortgage of immovable properties.
The Bill envisages certain significant amendments to the Central law: for example, the inclusion of “brother,” “sister,” “wife of predeceased son” and “husband of predeceased daughter” in the definition of family. At present, the term “family” means father, mother, husband, wife, son, daughter and grandchild.
About four years ago, the State government had even clarified that the term would include brothers and sisters. To give statutory backing to this aspect and a few other issues, the Assembly, in May last year, passed four Bills to amend the Central law. But, the Bills were yet to see the light of the day as they were lying with the Union government for getting President’s assent.
Another measure of benefit that the new Bill would give to people is to permit consolidated payment of stamp duty on notes sent by brokers to their clients on sale or purchase of equities. At present, the duty has to be paid on each and every note.
Apart from this issue, two others – levy of stamp duty on construction agreements and transfer of property due to merger or demerger of companies – were covered in the 2012 Bills. The latest legislation seeks to incorporate all these and much more.
As per the amendment made last year, one per cent stamp duty would be levied on construction agreements between buyers and promoters of flats.
Distinguishing the 2012 Bills from the latest Bill, an official says that while the former pertains only to four aspects, this year’s legislation is comprehensive. Even if the 2012 Bills get the assent, the latest Bill will take precedence once it also receives the President’s nod.
Yet another public-friendly measure proposed is that in respect of stamp duty on deeds of rectification, the guideline value that prevailed on the date of registration of the original documents will be taken into account instead of the present arrangement of reckoning the current value.
Asked whether the levy of stamp duty on transactions regarding securities would not lead to any adverse effect, another official replies that even now, brokers are collecting from their clients money for stamp duties.
In many cases, they are not passing on the collections to the government.
The new legislation will streamline all such transactions.