Himachal moots revising stamp duty structure to boost revenue

At present, the stamp duty for land registration is 4% for women and 6% for men. However, the amendments seek to establish a flat 8% stamp duty on land deals exceeding ₹50 lakh, regardless of gender.

In a bid to boost its revenue, the Himachal Pradesh government proposes to increase stamp duty rates for land registration and expand its ambit to mining leases and company transactions.

The proposed amendments to the Indian Stamp Act aim to strike a balance between fair taxation and boosting economic growth by providing a clearer legal framework for stamp duty imposition. (HT file photo)

The state government has initiated the process to amend the Indian Stamp Act, 1899, by proposing to increase the fee structure to rationalise stamp duty for revenue services and expand its application.

At present, the stamp duty for land registration is 4% for women and 6% for men. However, the amendments seek to establish a flat 8% stamp duty on land deals exceeding ₹50 lakh, regardless of gender. The aim is to boost the state’s revenue.

The amendments to the Indian Stamp Act, a central legislation, will be introduced through two Bills. One of the Bills will be introduced in the monsoon session of the assembly in September and the other in the winter session.

The government’s decision to modify the existing schedule is the first in 11 years and is expected to have far-reaching consequences, particularly for the state’s revenue.

The government plans to levy stamp duty on mining leases and transactions involving companies. At present, such cases often lead to litigation, resulting in the state losing legal battles due to the absence of a clear legislation. By amending the Indian Stamp Act, the government seeks to enable the imposition of separate stamp duties for partnership deeds, mergers, and amalgamations under the Mining Lease and Companies Act. The move will streamline the process and generate additional revenue.

Principal secretary, revenue, Onkar Chand Sharma said that the process of amending the Indian Stamp Act is a “complex and thorough” one.

The amendment Bills will undergo a two-step approval process. The Bill introduced during the monsoon session will require the assembly’s consent, which, if obtained, will then be followed by a notification under the governor’s authorisation.

The second Bill, introduced in the winter session, will need the approval from the Government of India. This legislation seeks to redefine the subjects within the purview of the state government under the Indian Stamp Act, thereby granting the authority to levy separate stamp duties in specific scenarios.

The proposed amendments aim to strike a balance between fair taxation and boosting economic growth by providing a clearer legal framework for stamp duty imposition.