Government of Karnataka amends the Karnataka Act 1957 by way of the Karnataka Stamp (Amendment) Act, 2023
The Government of Karnataka issued a notification on February 3, 2024, regarding the Karnataka Stamp (Amendment) Act, 2023 ("2023 Amendments") which currently cover several articles of Schedule 1 of the Karnataka Stamp Act, 1957. The existing rate of stamp duties on many instruments is revised with the intention of augmenting the revenue of the State.
Please note that the table below provides the revised stamp duties for only certain instruments and does not cover all the instruments for which revised stamp duties are specified.
| Article Reference | Description of Instrument | Current Stamp Duty | Revised Stamp Duty |
| 5(b) | Agreement or memorandum of an Agreement relating to the purchase or sale of a Government security | INR 1 for every INR 10,000 or part thereof of the value of the security atthe time of its purchase or sale, as the case may be, subject to a maximum of INR 1,000. | The cap of INR 1,000 is removed. |
| 5(e)(ii) | Agreement in relation to sale of immovable property in part performance of a contract – where possession is not delivered | Ten paise for every INR 100 or part thereof on the market value equal to the amount of consideration subject to a maximum of INR 20,000 but not less than INR 500 | Increased to Fifty paise for every INR 100 or part thereof on the market value equal to the amount of consideration. The cap of INR 20,000 is removed. |
| 5(i-d) (ii) | Agreement relating to building works where the amount or consideration exceeds INR 10,00,000 | INR 100 and in addition INR 100 for every INR 10,00,000 or part thereof in excess of INR 10,00,000, subject to a maximum of INR 500,000 |
INR 500 and in addition INR 500 for every INR 10,00,000 or part thereof in excess of INR 10,00,000. The maximum cap is increased to INR 10,00,000 |
| 6(1)(i) | Agreement relating to deposit of title deeds, where the loan amount does not exceed INR 10,00,000 | 0.1 % on the loan or debt amount subject to a minimum of INR 500 | Increased to 0.5% of the loan amount subject to a minimum of INR 500. |
| 6(1)(ii) | Agreement relating to deposit of title deeds, where the loan amount exceeds INR 10,00,000 | 0.2% on the loan or debt amount subject to a maximum of INR 10,00,000 | Increased to 0.5% of the loan or debt amount. The maximum cap of INR 10,00,000 is removed |
| 6(2) | Agreement relating to pawn or pledge or moveable property, where such pawn or pledge is made by way of security for the repayment of the money advanced or to be advanced by way of a loan or an existing debt or future debt – If such loan is payable on demand or otherwise | ||
| (i) | Where the loan amount exceeds INR 100,000 butdoes not exceed INR 10,00,000 | 0.1% of the debt amount. | Increased to 0.5% of the debt amount |
| Where the loan amount exceeds INR 10,00,000 | 0.2% of the debt amount subject to a maximum amount of INR 10,00,000. | Increased to 0.5% of the debt amount and the cap is removed. | |
| 11(b) |
Arbitral award If the property which is the subject matter of award is a movable property and the amount or market value of the property as set forth in the award does not exceed INR 50,00,000 |
¾% of the amount or market value. | Increased to 1% of the amount or market value |
| When the amount or market value of the property set forth in the award exceeds INR 50,00,000 but does not exceed INR 5,00,00,000 | INR 37,500 + 1/2% of the amount or market value exceeding INR 50,00,000 | Increased to 1% of the amount or market value | |
| When the amount or market value of the property set forth in the award exceeds INR 5,00,00,000 | INR 37,500 + INR 2,25,000 + 1/4% of the amount or market value exceeding INR 5,00,00,000 | Increased to 1% of the amount or market value | |
| 20(4) (i) | Amalgamation of companies, including a subsidiary amalgamating with parent company | 3% on the market value of the property of the transferor company, located within the State of Karnataka and transferred to the transferee company; or an amount equal to 1% of the aggregate value of shares issued or allotted in exchange, or otherwise and in case of a subsidiary company, shares merged (or cancelled) with parent company. if any, paid for such amalgamation; whichever is higher, subject to a maximum of INR 25,00,00,000. | 5% on the market value of the property of the transferor company, located within the State of Karnataka and transferred to the transferee company; or an amount equal to 5% of the aggregate value of shares issued or allotted in exchange, or otherwise and in case of a subsidiary company, shares merged (or cancelled) with parent company. if any, paid for such amalgamation; whichever is higher subject to a maximum of INR 25,00,00,00. |
| 20(4) (ii) | Reconstruction or Demerger of a Company | 3% on the market value of the property of the transferor company, located within the State of Karnataka, and transferred to the resulting company; or an amount equal to 1% of the aggregate value of shares issued or allotted to the resulting company and in addition, the amount of consideration if any, paid for such demerger or reconstruction; whichever is higher subject to a maximum of INR 25,00,00,000. | 5% on the market value of the property of the transferor company, located within the State of Karnataka, and transferred to the resulting company; or an amount equal to 5% of the aggregate value of shares issued or allotted to the resulting company and in addition, the amount of consideration if any, paid for such demerger or reconstruction; whichever is higher subject to a maximum of INR 25,00,00,000. |
| 20 (7) | Conveyance relating to Transferable Development Rights | 3% on the market value of the Transferable Development Rights equal to the market value of the corresponding portion of the property leading to such Transferable Development Rights. | Increased to 5%. |
| 34 (c)(i) | An agreement relating to mortgage for every sum secured not exceeding INR 1,000 | For every sum secured not exceeding INR 1,000 will be of INR 10 | Increased to INR 50 |
| 34(c) (ii) | An agreement relating to mortgage wherein for every INR 1,000 or part thereof, secured in excess of INR 1,000 | INR 10 plus INR 1 for every INR 1,000 or part thereof in excess of INR 1,000 | Increased to INR 50 plus INR 5 for every INR 1,000 or part thereof in excess of INR 1,000 |
| 40A (B) | An agreement relating to reconstruction or amalgamation of Limited Liability Partnership | 3% on the consideration or market value of the property whichever is higher of the transferor LLP located within the State of Karnataka. | Increased to 5% on the consideration or market value of the property whichever is higher of the transferor LLP located within the State of Karnataka. |
| 44(b) | Reconveyance of mortgaged property where the consideration for which the property was mortgaged exceeds INR 1000 | The stamp duty applicable was of INR 100 | Increased to INR 200 |
| 47(a) | An agreement relating to security bond or mortgage-deed, where in the amount secured does not exceed INR 1,000 | Fifty paise for every INR 100 or part thereof | Increased to INR 2 for every INR 100 or part thereof |
| 47(b) | An agreement relating to security bond or mortgage-deed, where in the amount secured exceeds INR 1,000 | The stamp duty was of INR 200 | Increased to INR 500 |
| 51 | An agreement relating to surrender of lease in any other cases, except when the duty with which the lease is chargeable does not exceed INR 22.50 | The stamp duty was of INR 100 | Increased to INR 200 |
Amendments made to the stamp duty payable on various instruments in Tamil Nadu
The Government of Tamil Nadu ("GoTN") had passed an amendment act i.e., the Indian Stamp (Tamil Nadu Amendment) Act, 2023 ("Amendment Act"), wherein the stamp duty payable in relation to certain instruments are revised. The revised stamp duty are effective from May 3, 2024.
| S.No. | Instrument | Relevant Article of the Schedule I to the Act | Stamp Duty Prior to Amendment | Stamp Duty Pursuant to Amendment |
| 1. | Adoption deed | 3 | INR 100 | INR 1,000 |
| 2. | Affidavit including affirmation or declaration | 4 | INR 20 | INR 200 |
| 3. | Agreement (Not otherwise provided for) | 5(j) | INR 20 | INR 200 |
| 4. | Articles of Association | 10 | INR 300 | 0.05% on the authorised share capital of the company subject to a maximum of INR 5,00,000 |
| 5. | Cancellation | 17 | INR 50 for instrument (any instrument by which any instrument previously executed is cancelled) if attested and not otherwise provided. | INR 1,000 for instrument (any instrument by which any instrument previously executed is cancelled), if attested whether it involves transfer of property or not and not otherwise provided for. |
| 6. | Copy or Extract certified to be a true copy or extract by or by order of any public offer and not chargeable under the law for the tile being in force relating to Court fees | 24(i) | INR 5 | INR 100 |
| 7. | 24(ii) | INR 20 in any other case | INR 100 in any other case | |
| 8. | Counterpart or Duplicate if the duty with which the original instrument is chargeable exceed five rupees or any other case | 25(b) | INR 20 | INR 500 |
| 9. | Lease where the period of lease is below thirty years | 35(a) | 1% on the rent, fine, premium or advance, if any payable. | 1% on the rent, fine, premium or advance or security deposit, if any, payable. |
| 10. | Lease where the period of lease is above thirty years and up to ninety-nine years | 35(b) | 4 % on the rent, fine, premium or advance, if any payable. | 4 % on the rent, fine, premium or advance or security deposit, if any, payable. |
| 11. | Lease where the period of lease is above ninety-nine years | 35(c) | 7% on the rent, fine, premium or advance, if any payable. | 7% on the rent, fine, premium or advance or security deposit, if any, payable. |
| 12. | Memorandum of Association | 39 | INR 200 if accompanied by Articles of Association (or) INR 500 if not so accompanied | INR 200 |
| 13. | Partition deed executed between non-family members | 45(b) | 4% for the amount of the value of the separated shares of the property | 4% for the amount of the market value of the separated shares of the property |
| 14. | Partnership | 46A | INR 300 | INR 1000 |
| 15. | Power of attorney executed solely for registration or admitting execution | 48 (a) | INR 5 | INR 500 |
| 16. | Power of attorney when authorising one person or more to act in a single transaction other than the case mentioned in clause 48(a) | 48 (b) | INR 15 | INR 500 |
| 17. | Power of attorney when authorising not more than five persons to act jointly and severally in more than one transaction or generally | 48 (c) | INR 100 | INR 1000 |
| 18. | Power of attorney when authorising more than five but not more than ten person to act jointly and severally in more than one transaction or generally | 48(d) | INR 175 | INR 1000 |
| 19. | Power of Attorney to sell immovable property for consideration | 48(e) | 5% on consideration | 5% on market value |
| 20. | Power of Attorney without consideration granted in favour of family member | 48(f) | INR 20 for each person authorised | INR 1000 |
| 21. | Power of Attorney without consideration granted in favour of non- family member (newly inserted) | 48(g) | 1% on market value of the immovable property | |
| 22. | Power of attorney in any other case | 48(h) | - | INR 1000 for each person authorised |
| 23. | Reconveyance of Mortgaged Property | 54(b)(i) | INR 80 | INR 1000 |
| 24. | 54(b)(ii) | INR 70 | INR 1000 | |
| 25. | Security Bond | 57 | INR 80 | INR 500 |
| 26. | Revocation of Settlement | 58(b) | INR 80 | INR 1000 |
| 27. | Surrender of lease | 61 | INR 40 | INR 1000 |
| 28. | Transfer relating to trust | 62 (e) | INR 30 | INR 1000 |
| 29. | Declaration of Trust | 64 (a) | INR 180 | INR 1000 |
| 30. | Revocation of Trust | 64(b) | INR 120 | INR 1000 |
In addition to the above, the explanation of the word 'family' as set out in Article 55 is also amended to include "the legal heirs of a deceased family member, if any". Further, the amended explanation of the word 'family' is also extended to articles 45(b), 46(b) and 48.
Conclusion
The Amendment Act is a significant revision to the stamp duty levied on various instruments to the prevailing times, which was otherwise levied on obsolete duty. Also, the extension of the definition of the word 'family' to other instruments will promote innovative and unique structures in Estate Planning and Real Estate Transactions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.