The government is finalising changes in the century-old stamp duty laws, with a view to align it with the modern corporate practices based on inputs from various stake holders. "Revised Cabinet Note and the Draft Bill is under finalisation based on the inputs received (from various ministries and departments)," the finance ministry said.
The government has also consulted other stakeholders, including representatives of stock exchanges as stamp duties have implications on transactions in the financial market.
The financial sector has been pleading for removal or reduction of stamp on financial transactions arguing it was essential for encouraging bond market. Finance minister Pranab Mukherjee in his Budget speech had said that a Bill would be introduced in Parliament shortly to amend the Indian Stamp Act, 1899.
After inter-ministerial consultations, the finance ministry prepared a revised set of amendments to the Act and a draft Cabinet note has been circulated.
The stamp duty is applicable on bill of exchange, cheques, transfer of shares, agreements, affidavit, articles of association of a company, partnership and lease deed, power of attorney and security bond, besides others.
In the Budget speech, Mukherjee had said "With the development of the economy, the need to review the provisions of the Indian Stamp Act, 1899 has been felt over the years. I propose to introduce a Bill shortly to amend the Indian Stamp Act".