GOVERNMENT OF INDIA RULES UNDER THE STAMP ACT

(Finance Department Notification No. C-63-Stamps-25, Dated 5th May, 1925)

RULES UNDER THE INDIAN STAMP Act, 1899

 

Contents

v    

PRELIMINARY

v    

IMPRESSED STAMPS

v    

ADHESIVE STAMPS

v    

MISCELANEOULS

v    

NOTES AND ADMINISTRATIVE INSTRUCTIONS ON SECTIONS AND ARTICLES OF SCHEDULES-I AND I-A OF THE STAMP ACT

 

 

 

CHAPTER-I

PRELIMINARY

1.        Short title- These rules may be called the Indian stamp Rules, 1925.

2.        Definition- In these rules-

(a)                                                         ‘The Act’ means the Indian Stamp Act 1899 (II of 1899).

(b)                                                        ‘Section’ means a section of the Act.

(c)                                                        ‘Schedule’ means a schedule of the Act.

(d)       ‘Superintendent of Stamps’ means the Superintendent of Stamps, Madras, Bombay, Karachi, Rangoon or Nagpur, and includes the Financial Commissioner, Punjab, and any other Officer appointed by the Local Government to perform the functions of a Superintendent of stamps.

 

3.        Description of Stamps- (1) Except as otherwise provided by the Act or by these rules-

(i)     all duties with which any instrument is chargeable shall be paid, and such payment shall be indicated on such instrument, by means of stamps issued by Government for the purposes of the Act, and

(ii)       a stamp which by any word or words on the face of it is appropriated to any particular kind of instrument, shall not be used for an instrument of any other kind.

 

 

Note to clause (ii)-A draft drawn by a firm in Bombay on a bank in Amritsar cannot be stamped with the Foreign Bill Stamp. See note to rule 17.

           (2)       There shall be two kinds of stamps for indicating the payment of duty with which instruments are chargeable namely-

(a)                                                         impressed stamps, and

(b)                                                        adhesive stamps.

 

 

CHAPTER II

OF IMPRESSED STAMPS

4.        (1) Hundis- Hundis, other than hundis which may be stamped with an adhesive stamp under section 11, shall be written on papers as follows, namely:

(a)              A hundi payable otherwise than on demand, but not at more than one year after date or sight and for an amount not exceeding rupees thirty thousand in value, shall be written on paper on which a stamp of the proper value bearing the word ‘hundi’ has been engraved or embossed.

(b)             A hundi for an amount exceeding rupees thirty thousand in value, or payable at more than one year after date or sight, shall be written on paper supplied for sale by the Government to which a label has been affixed by the Collector* of stamp Revenue, Calcutta or a Superintendent of stamps, and impressed by such officer in the manner prescribed by rule 11.

(2)       Every sheet of paper on which a hundi is written shall be not less than 85/8 inches long and 51/8 inches wide, and no plain paper shall be joined thereto.

(3)       The provisions of sub section (1) of rule 7 shall apply in the case of hundis.

 

Note-     Hundi stamps should not be used for any documents except Hundis under this rule, and for promissory notes and bills of exchange other than those provided for by section 11 of the Act, or by rules  13 and 17 (see rule 5). No plain paper should be joined to an impressed sheet bearing the word ‘Hundi’. Clause 3 should be noted carefully.

 

*Government of India, Finance (C.R) 13, dated 20th May 1926.

 

5.        Promissory notes and bills of exchange-A promissory note or bill of exchange shall, except as provided by section 11 or by rules 13 and 17, be written on paper on which a stamp of the proper value, with or without the word ‘hundi’ has been engraved or embossed.

 

6.        Other instruments- Every other instrument chargeable with duty shall, except as provided by section 11 or by rules* 10, 12 and 13, be written on paper on which a stamp of the proper value, not bearing the word ‘hundi’ has been engraved or embossed.

 

7.        Provision where single sheet of paper is insufficient-(1) Where two or more sheets of paper on which stamps are engraved or embossed are used to make up the amount of duty chargeable in respect of any instrument, a portion of such instrument shall be written on each sheet so used.

 

(2)       Where a single sheet of paper, not being paper bearing an impressed hundi stamp, is insufficient to admit of the entire instrument being written on the side of the paper which bears the stamps, so much plain paper may be sub joined thereto as may be necessary for the complete writing of such instrument:

           Provided that in every such case a substantial part of the instrument shall be written on the sheet which bears the stamp before any part is written on the plain paper subjoined.

 

**8.     One anna and two annas impressed stamps- The duty on any instrument which is chargeable with a duty of one anna under the Act or of two annas under articles 5, 19, 36, 37, 43, 49 and 52 of Schedule-I  may be denoted by a coloured impression marked on a skeleton form of such instrument by the Collector** of Stamp Revenue at Calcutta or the Superintendent of Stamps.

 

**9.     The Proper Officer- The officers specified in Appendix-I and any officer appointed in this behalf by the Local Government of a Governor’s Province, are empowered to affix and impress or perforate** labels, and each of them shall be deemed to be ‘the proper officer’ for the purposes of the Act and of these rules.

 

*Government of India, Finance (C.R) 13, dated 15th October 1927.

**(Government of India, Finance Department (Central Revenues) Notification Stamp No. 13 dated 20th May 1926).

**See note to rule 11.

 

10.      Affixing and impressing of labels by proper officer permissible in certain cases- Labels may be affixed and impressed or perforated* by the proper officer in the case of any of the following instruments, namely:

 

*(Government of India, Finance Department (Central Revenues), notification No. 13 dated the  20th May 1926)

 

(i)       those specified in Appendix II, and the counter parts thereof other than instruments on which the duty is less than two annas; and

(ii)       Those specified in Appendix III, when written in any European language, and accompanied, if the language is not English, by a translation in English:

          

Provided that the Location Government may direct that this rule shall apply, subject to any conditions, which it may prescribe, to agreements or memoranda of agreements such as are specified in Appendix III, when written in any oriental language.

 

Notes- (1) The Punjab Government have ruled, under Act XVIII of 1879, that the certificates of Pleaders, Mukhtars and Revenue agents, admitted under that Act, shall be stamped with impressed labels-(Punjab Government Notification No. 743, dated 18th July 1887).

(2)          Note to clause (ii) and proviso-Instruments of agreements and memorandum of agreement when written in the Urdu character may, in the Punjab, be stamped with special adhesive labels-(Punjab Government, Finance Department, Notification No. 3873, dated 6th February 1926).

 

Financial Commissioners’ Office Punjab

Correction Slip No. 29 Dated Lahore The  13th August 1935

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 4

 

For the proviso to clause (ii) and note (2) to rule 10 the following should be substituted:

‘Provided that the Local Government may direct that this rule shall apply, subject to any conditions which it may prescribe to any of the instruments specified in Appendix III, other than Bills of Exchange when written in any oriental language’.

(Government of India, Finance Department (Central Revenues), notification No. 4-Stamps, dated the 14th July 1934).

(2)       Note to clause (ii) and proviso- In the Punjab the restriction on the use of special adhesive labels has been removed in the case of all instruments (other than Bills of Exchange) specified in Appendix III to these rules when written in the Urdu character.

 

( Punjab Government notification No. 543-St. dated the 3rd  July 1935).

Price 6 pies

 

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Financial Commissioners’ Office Punjab

Correction Slip No. 68 Dated Lahore The  18th January 1937

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 4

           In the second line of note (1) to rule 10, the word and comma ‘pleaders,’ should be deleted.

 

( Punjab Government notification No. 1046-St. dated the 5th September 1936).

 

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11.      Mode of affixing and impressing labels-(1)  The proper officer shall, upon any instrument specified in rule 10 being brought to him before it is executed, and upon application being made to him, affix thereto a label or labels of such value as the applicant may require and pay for and impress or perforate such label or labels by means of a stamping machine or a perforating machine, and also stamp or write on the face of the label or labels the date of impressing or perforating the same.

 

Note-It has been ruled that the words ‘before it is executed’ must be taken to mean ‘before an instrument is fully and finally executed by all the parties thereto,’ hence an instrument executed by one party or more, but not by all the parties thereto may be stamped under this rule-(Punjab Government letter No. 1051, dated 15th April 1880).

 

           In the case of instruments written on parchment, the labels shall be further secured by means of metallic eyelets.

(2)       On affixing any label or labels under this rule, the proper officer shall, where the duty amounts to rupees five or upwards, write on the face of the label or labels his initials, and where the duty amounts to rupees twenty or upwards, shall also attach his usual signature to the instrument immediately under the label or labels.

(3)       The following officers may discharge the functions of the proper officer under sub rule (2), namely:

(i)        Any principal assistant of the proper officer empowered by the Local Government in this behalf;

(ii)       In Calcutta, the Deputy Collector and the Superintendent of the Stamp Department of the Collector’s office;

(iii)      In Karachi, the Assistant Superintendent of Stamps; and

(iv)      In Lahore, the head or any other Assistant for the time being in charge of the stamping work in the Financial Commissioner’s Office.

 

Note to rule 8-11-The stamping is done in the office of the Financial Commissioners, Punjab (Rule 2(d) and Appendix I) for the Punjab for  the North West Frontier Province. See also Part III, Chapter 6.

 

Financial Commissioners’ Office Punjab

Correction Slip No. 166 Dated Lahore The  28th March 1942

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 5

           In the note at end or rule 11 delete the words ‘and for the North West Frontier Province’.

( N.W.F.P. Government (Revenue Department) notification No. 1880 S.A., dated the 15th January 1942).

 

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12.      (1) Certain instruments to be stamped with impressed label- Instruments executed out of British India and requiring to be stamped after their receipt in British India (other than instruments which, under section 11 of rule 13, may be stamped with adhesive stamps) shall be stamped with impressed labels.

 

(2)       Where any such instrument as aforesaid is taken to the Collector under section 18, sub section (2), the Collector, unless he is himself the proper officer, shall send the instrument to the proper officer, remitting the amount of duty paid in respect thereof; and the proper officer shall stamp the instrument in the manner prescribed by rule 11, and return it to the Collector for delivery to the person by whom it was produced.

 

Note: See Part III Chapter 6.

 

 

CHAPTER III

OF ADHESIVE STAMPS

13.      Use of adhesive stamps on certain instruments - The following instruments may be stamped with adhesive stamps, namely:

(a)              Bills of exchange payable otherwise than on demand and drawn in sets, when the amount of duty does not exceed one anna for each part of the set.

(b)             Transfers of debentures of public companies and associations.

(c)             Copies of maps and plans and printed copies when chargeable with duty under Article 24 of Schedule-I.

 

Financial Commissioners’ Office Punjab

Correction Slip No. 80 Dated Lahore The  12th October 1935

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 6

In clause (e) of rule 18 for the words ‘copies of maps and plans and printed copies,’ the words ‘copies of maps of plans, printed copies and copies of or extracts from registers given on printed forms ‘ should be substituted.

Government of India Finance Department(Central Revenues) notification No. 13., dated the 14th September 1935).

 

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Financial Commissioners’ Office Punjab

Correction Slip No. 192 Dated Lahore The  22nd November 1945

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 6

For the existing entry No. 13 (c) as inserted by correction slip No. 30, dated the 12th October 1935, substitute the following :

‘Copies of maps and plans and printed copies, copies of or extracts from registers given on printed forms and copies of records of the courts and offices under the control of the High Court of Judicature at Lahore other than the records of Judicial proceedings when chargeable with duty under Article 24 of Schedule I-A.’

 

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(d)             Instruments chargeable with duty under Articles 5 (a) and (b) and 43 of Schedule I.

(e)              Instruments chargeable with stamp duty under Article 47  of Schedule I.

(f)              Instruments chargeable with stamp duty under Articles 19, 36, 37, 49 (a) (ii) and (iii) and 52 of Schedule I.

 

Note: See Rules 16 and 17.

 

13-A.   Notwithstanding anything contained in these rules whenever the stamp duty, payable under the Act in respect of any instrument, cannot be paid exactly by reason of the fact that the necessary stamps are not in circulation the amount by which the payment of duty shall on that account be in defect shall be made up by the affixing of one anna and half anna adhesive stamps such as are described in rule 16, provided that a Local Government may direct that instead of such stamps, adhesive Court fee stamps shall be used for the purpose.

 

14.      Supply of deficient duty on transfer of share- When any instrument of transfer  shares in a Company or Association is written on a sheet of paper on which a stamp of the proper value is engraved or embossed and the value of the stamp so engraved or embossed is subsequently, in consequence of a rise in the value of such shares, found to fall short of the amount of duty chargeable under Article No. 62 (a) of Schedule I, one or more adhesive stamps bearing  the words ‘Share Transfer’ may be used to make up the amount required.

 

15.      Enrolment of Advocates, Vakils or Attorneys- *When adhesive stamps are used to indicate the duty chargeable on entry as an Advocate, Vakil or Attorney on the roll of any High Court such stamps shall be  affixed under the superintendence of a gazetted officer of High Court, who shall obtain the stamp from the Superintendent of Stamps or other officer appointed in this behalf by the Local Government and account to him for it. Such gazetted officer shall, after affixing the stamp, write on the face of it his usual signature with the date thereof.

 

Note: This stamping is at present done in the office of the Financial Commissioner at Lahore.

 

*(Government of India, Finance Department (Central Revenue), Notification Stamps No. 13, dated 20th May 1926).

 

*16.     Except as otherwise provided by these rules, the adhesive stamps used to denote duty shall be the requisite number of stamps-

(i)     bearing the words ‘Four annas’ or ‘Two Annas’ or ‘One Anna’            or ‘Half Anna’; and

(ii)(a)   in the case of instruments executed elsewhere than in Burma, bearing the words ‘India Revenue or, where the instrument has been executed in Bihar, and Orissa, the words ‘Revenue B. & O.’ or where the instrument has been executed in the Bombay Presidency the words ‘Bombay Revenue’.  

(iii)      in the case of instruments executed in Burma inscribed for use either for postage or for revenue or for both postage and revenue.’

 

*(Government of India, Finance Department (C.R.), Notification Stamps No. 3, dated 31st March, 1934).

 

17.      Special adhesive stamps to be used in certain cases –The following instruments when stamped with adhesive stamps shall be stamped with the following descriptions of such stamps, namely:

 

(a)       Bills of exchange, cheques and promissory notes drawn or made out of British India and chargeable with a duty of more than one anna; with stamps bearing the words ‘Foreign Bill’.

 

Note-A promissory note, bill of exchange, or cheque drawn or made in British India, and made payable in or drawn upon any person resident in British India is an ‘Inland instrument’. Any instrument not so drawn made or made payable is a’ foreign instrument’. (Section 11 and 12 of Act XXVI of 1881). See amendments to articles 13 and 21 of Schedule I, cheques are no long liable to duty.

 

(b)       Separate instruments of transfer of shares and transfers of debentures of Public Companies and Associations;      with stamps bearing the words ‘Share Transfer’.

(c)                                   Entry as an Advocate, Vakil or Attorney on the roll of any High Court; with stamps bearing the word ‘Advocate’, ‘Vakil’ or ‘Attorney’, as the case may be.

(d)                                   Notarial acts; with foreign bill stamps bearing the world ‘Notarial’.

(e)                                   Copies of maps or plans and printed copies certified to be true copies; with court fee stamps.

 

Financial Commissioners’ Office Punjab

Correction Slip No. 80 Dated Lahore The  12th October 1935

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 8

In clause (e) of rule 17 for the words ‘copies of maps or plans and printed copies,’ the words ‘copies of maps or plans, printed copies and copies of or extracts from registers given on printed forms ‘ should be substituted.

Government of India Finance Department (Central Revenues) notification No. 13, dated the 14th September 1935).

 

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Financial Commissioners’ Office Punjab

Correction Slip No. 192 Dated Lahore The  22nd November 1945

Punjab stamp Manual, 1934

Part-I B, Chapter 2, Page 8

For the existing entry No. 17 (e) as inserted by correction slip No. 31, dated the 12th October 1935, substitute the following :

‘(i) Copies of maps or plans and printed copies, copies of or extracts from registers given on printed forms and copies of records of the courts and offices under the control of the High Court of Judicature at Lahore other than the records of Judicial proceedings certified to the true, and

(ii) Printed Central Excise Bond forms to be executed under with court fee stamps’.         

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(f)                                    instruments chargeable with stamp duty under Articles 5 (a) and (b) or 43 of Schedule I; with stamps bearing the words ‘Agreement’ or ‘Brokers’ Note,’ respectively.

(g)                                   Instruments chargeable with stamp duty under Article 47 of Schedule I; with stamps bearing the word ‘Insurance’.

 

 

CHAPTER IV

MISCELLANEOUS

18.      Provision for cases in which improper description of stamp is used- When an instrument bears a stamp of proper amount, but of improper description, the Collector may, on payment of the duty with which the instrument is chargeable certify by endorsement that it is duty stamps:

           *Provided that where the stamp borne on the instrument is a postage stamp and the proper description of stamp is a stamp bearing the words ‘India Revenue’, or the words ‘revenue B. & O.’ or the words ‘Bombay Revenue’, the Collector shall so certify if the instrument was executed before, and shall not so certify if it was executed on or after the Ist April 1935.

 

Note- See Section 37 and 40 of the Act.

*Government of India, Finance Department (C.R.), Notification Stamps No. 3, dated 31st March 1934.

 

*19.     Evidence as to circumstances of claim to refund or renewal- The Collector may require any person claiming a refund or renewal under Chapter V of the Act, or his duty authorised agent, to make an oral deposition on oath or affirmation or to file an affidavit, setting forth the circumstances under which the claim has arisen, and may also, if he thinks fit, call for the evidence of witnesses in support of the statement set forth in any such deposition or affidavit.

 

*Note- See Part III, Chapter 8.

 

20.      Payment of allowances in respect of spoiled or misused stamps or on the renewal of debentures- When an application is made for the payment, under Chapter V of the Act, or an allowance in respect of a stamp** which has been spoiled or misused or for which the applicant has no immediate use or on the renewal of a debenture, and an order is passed by the Collector sanctioning the allowance or calling for further evidence in support of the application, then if the amount of the allowance or the stamp given in lien thereof is not taken, or if the further evidence required is not furnished , as the case may be, by the applicant within one year of the date of such order, the application shall be struck off, and the spoiled or misused stamp (if any) sent to the Superintendent of Stamps or other officer appointed in this behalf by the Local Government for destruction.

 

*21.     Mode of cancelling original debenture on refund under section 55- When the Collector makes a refund under section 55, he shall cancel the original debenture  by writing on or across it the words ‘Cancelled’ and his usual signature with the date thereof.

 

*Note -See part III Chapter 8.

**(Government of India, Finance Department (Central Revenue), Notification Stamps No. 13, dated 20th May 1926).

 

22.      Rewards- On the conviction of any offender under the Act, the Collector may grant to any person who appears to him to have contributed thereto a reward not exceeding such sum as the Local Government may fix in this behalf.

 

Note-See Section 69 of the Act, Part I-A.

          

The sum fixed is Rs. 50 (Punjab Government No. 1501, dated 24th August 1882). Any magistrate trying an offender (Section 71) should, if he thinks the grant of a reward necessary, refer the matter for the orders of the Collector. In order that cases in which rewards should be given are not lost sight of, the Record keeper should pass over the files of all such relevant cases before filing them to the Head Vernacular Clerk in order that he might obtain the orders of the Collector. Fines under the Stamp Act are credited to ‘XVII-Administration of Justice’ and rewards should be drawn on separate bills and debited to the allotment provided for the purpose under head 7- Stamps’.

 

 

NOTES AND ADMINISTRATIVE INSTRUCTIONS ON SECTIONS AND ARTICLES OF SCHEDULES I AND I-A OF THE STAMP ACT.

1.        In the paragraphs that follow sections of the Stamp Act and articles in schedules  I and I-A thereof are discussed, the discussion being supplemented, where necessary, by quoting the orders issued by competent authority.

A---Notes on sections of the Stamp Act.

2.        (i) Section `(2(1) . ----“Banker “ includes---

(a)   person or a corporation or company acting as bankers(Section 3, Act 26 of 1881);and

(b)   a Government treasury in respect of local fund money lodged therein.

(ii) Section 2(2) .— “A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker , directing a certain person to pay a certain sum of money only to , or to the order of certain person, or to the bearer of the instrument . A promise or order to pay is not conditional within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event, which, according to the ordinary expectation of mankind, is certain to happen although the time its happening may be uncertain, The sum payable may be ‘certain’ within the meaning of this section and section 4, although it includes future interest, or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default  of payment of an instalment, the balance unpaid shall become due. The person to whom it is clear that the direction is given, or that payment is to be made, may be ‘certain person’ within the meaning of this section and section 4 although he is misnamed, or designated by description only.”(Section 5 Act 26 of 1881.)

(iii) Section 2(3) – In a  promissory note or bill of exchange the expression “at sight” and “ on presentment” mean on demand (Section  21, Act 26 of 1881.). A promissory note or bill of exchange , in which no time for payment is specified, is payable on demand. (Section 19 of the same Act.)

(iv) Section 2(5) –Clause(a) relates to a bond with a condition: Clauses(b) and  (c) relate to single bonds.

It is necessary to hold firmly in mind the requisites of a bond.  The requisites are as follows :-

(1)                           It must be in writing.

(2)                           It must bear the signature, seal, or thumb mark of the obligor, 

(3)                           It must be attested by at least one witness who is not  the writed.

(4)                           It must contain a distinct agreement by which the obligor binds himself to pay something to the obligee.

(5)                           It must not be payable to bearer or order.

When any one of these requisites is absent, the instrument is not a bond.

For  discussion as to differentiation between a bond and an acknowledgment please see note under article 1 of the schedules to the stamp Act—paragraph 58 infra.

 (v) Section 2(7).  - Cheques are no longer liable to stamp duty ( See Indian Finance Act, 5 of 1927.)

(vi) Section 2(8)(d). – The Chief Controlling Revenue Authority in the Punjab is the Financial Commissioner , and as such he exercises the powers and functions which under the Stamp Act, are required to be exercised by the Chief Controlling Revenue Authority, such as those mentioned in sections 45,56,57 and 70 But independently  of these, the Financial Commissioner, being charged with  the general control of the stamp revenue as a matter of administration , may exercise such powers and discharge such duties as the Government  may direct, so far as such powers and duties are not opposed to, or inconsistent with the stamp law.

(vii) Section 2(9)(b). - In the case of Lahore district the powers of Collector have been conferred on the First Assistant to the Deputy Commissioner, Lahore, The power of Collector to sanction allowances for non-judicial stamps under Chapter V of the Stamp Act have also been conferred upon all officers in charge of treasuries who have passed the treasury branch of the departmental examination (Punjab Government Notification no. 28321-F ., dated the 4th  October 1928, and no. 4983 –R & S., dated the 14th August 1934)

(viii) Section 2 (12). -“Signed “ and “signature” include “ marked “ and “mark” in an illiterate person(The General Clauses Act, 10 of 1897.)

(ix) Section 2(13) .—The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable , has been paid, is an impressed stamp for the purposes of section 49 of the Stamp Act.

(x) Section 2(15). --- “The final order “means not the order authorising  a  partition to proceed , but the order passed after the partition has been made, declaring the various allotments of land . (Reference by Revenue Board 2 All. 664 , F.B.)

(xi) Section 2(16).--- in section 105 of the Transfer of Property Act(4 of 1882) – a lease of immovable property is defined  as  a transfer of a right to enjoy such property , made for a certain time , express or implied , or in perpetuity, in consideration of a price paid or promised or of money, share of crops, service, or any other thing of value , to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms, The transferor is called the lessor, the transferee is called the lessee, the price is called the premium and money , share ,service ,or other thing to be so rendered is called the “ rent” .  The definition is confined to immovable property, and a lease of movable property would fall under schedule 1-A , article 5(c).

The word “toll” in clause (c) must be taken in its ordinary sense to mean a tax paid for some liberty or privilege, such as for passage over a bridge or ferry, or along a highway, or for selling in a market or fair, and such like does not include “octroi”. (Financial Commissioner’s Circular no. 35, dated 13th August,1833)

(xii) Section 2(17)—A mortgage is defined in section 58 of the Transfer of Property Act as the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced by way of a loan, an existing or future debt, or the performance of an engagement which may give rise to  pecuniary liability . In the F.B. ruling , 53 P. R. 1916( Allah Ditta V.Nazar Din) it was held that this definition should be adopted in the Punjab and given its full logical effect; and in consequences of this finding it was ruled that in the absence o a covenant to the contrary  the mortgage is complete or , in other words the transfer of interest is effected, not when the consideration for it is paid or made good,

(xiii) Section 2(18). – Expressions referring to “ writing” are to be construed as including references to printing , lithography, photography, and other modes of representing or producing words, in a visible form (General Clauses Act,10 of 1897, section 3(58).)

(xiv) Section 2(21) , -- For powers of attorney which are chargeable under the Court –fees Acts, section 19 , clause(I) and schedule II,. article 10, of that Act should  be referred to.

3.        Section 3 prescribed what instruments are chargeable under the Act with stamp duty. All instruments mentioned in schedules I an I-A and not exempted by those schedules, or by an order made under section 9, are so chargeable if executed in British India : it does not mater whether it relates to property situate or to any matter or thing done or to be done in or out of British India.

The exemptions given in schedules I-A and I as also remissions and reductions of duty made under section 9 and reproduced in chapter 1 of this part should be noted carefully.

Proviso (1)  --, In regard to the general exemptions in favour of Government the word” Government “ does not include the local bodies , Court of wards or the Administrator-General. Where, however, these bodies acted as a Government agency for the transactions of duties devolving upon Government as part of its ordinary administration such as making roads, erecting Government buildings, and the like, the general exemption would apply, ( Financial commissioner’s letter no. 6873, dated 13th September, 1884.) Government must be an express party, and if an instrument drawn in favour of a Government servant as a trustee for the Government , it would be liable to duty, ( All Cir, No. 7, dated 30th October, 1885.)

 

4.        Section 4. - A lease is not covered by this section

5.        Section 8. -  This section affords facilities to local authorities for issuing debentures upon payment  of composition duty . The penalty in clause(3) should be noted Act 11 of 1879 quoted has been repealed by Act 9 of 1914.

6.        Section 9 (a)  The reduction and remissions made by the Governor – General in council are reproduced in chapter 1 of this part.

7.        Section 10. - The rules framed by the Governor – General in council are printed in chapter 2 of this  part.

8.        Section 11. - Chapter ii of the rules framed by the Government of India and reproduce in Chapter 2 of this part should be read with this section . The use of adhesive stamps is, as a general rule, permissive and not obligatory, and where an impressed stamp paper is available and is suitable for the purpose , it may be used instead of an adhesive label.

 The Act excepts parts of bills of exchange payable otherwise than on demand and drawn in sets; but this exception is practically annulled by rule 13 of the Government of India rules in chapter 2 of this part.

9.        Section 12. – Cancellation of the stamp is made obligatory by this section and the penalty is contained in section 63 of the Act. See also sub – Section (2) . The mode of cancellation is , however, left to the individual concerned but it must be effectual.

Public officers should be careful to see that the adhesive stamps on instruments coming  before them have been properly cancelled, and have not been previously use.

10.      Section 13.    --- This section does not apply to adhesive stamps. The section requires the stamp to appear “ on the face of the instrument” and so it is necessary that part of the instrument should be written on the side of the paper which bears the stamp impression (Government of India letter no. 917, dated 28th February 1881, to Government of Bombay.) Attaching blank stamp – paper to the instruments written on plain or insufficiently stamped paper in therefore illegal.

11.      Section 16. —A duplicate or counterpart of an instrument may be endorsed under this section 9 see article 25 of schedule I-A.) No other method of denoting payment of duty has been prescribed.

12.      Sections 17 to 19-A. - Prescribe the proper time for stamping, instruments executed with in British India must be stamped at or before execution ( Section 17). The first holder in British India of a foreign bill of exchange payable otherwise than on demand or promissory note must stamp it before negotiating or presenting it for acceptance or payment (Section 19); or other foreign instruments must be stamped within three months after arrival in British India (section 18). The amendment in section 19-A should be noted carefully.

Where an instrument executed out of British India is brought to the collector after the expiry of three months allowed by section 18, he may, if he is satisfied that the omission to tamp it has been occasioned by accident, mistake or urgent necessity, proceed under sections 41 and 42 to validate it (Madras Stamps Manual 1933)

13.      Section 20. —This section prescribes the method of valuation of an instrument when the valuation in such an instrument is expressed in a currency other than that of British India. The following rates have been prescribed by the Government of India for the conversion of the Currencies hereinafter specified respectively into the currency of British India for the purpose of calculating ad valorem duty on instruments chargeable therewith: -

 

Currency

 

Sum

Equivalent

In Currency of British

India

 

 

Rs

A.

P.

British 

£ 1 sterling

13

5

4

French

1 France

0

1

9

German

1 Renten Mark

0

10

9 (as amended)

United States of America Or  Canadian

1 dollar

2

12

0

Chinese (Shanghai)

1 Tael

2

2

6

British Asiatic Possessions(Straits)

1 Dollar

1

8

0

Hongkong

1Dollar[a1] [a2] m

1

9

6

Mexican

1Dollar[a3] 

1

9

6

Japanese

1 yen

1

2

6

Persian

1 kran

0

5

0

        These rates are subject to alteration by a notification in Gazette of India.

Government of India, Finance Department ( Central Revenue)Notification C. no. 125 – stamps /25, dated 18th  September 1925, as amended by Notification no 8-Stamps,  dated 7th November 1931

 

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 [a1]

 [a2]That is “ British Dollar” and the “ Mexican Dollar” which are in current use in the Straits Settlements and elsewhere

 [a3]