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CS Professional · Drafting, Pleadings and Appearances · Laws relating to Drafting and Conveyancing

Meridian Traders Pvt Ltd executes a single instrument that both assigns a leasehold shop to Kavita Rao and, in the same document, creates a separate indemnity in favour of an unrelated party. Each matter, if recorded in a separate instrument, would attract its own stamp duty. How is the duty on this combined instrument determined under the Indian Stamp Act, 1899?

The duty is the aggregate of the duties that separate instruments for each distinct matter would attract. Under Section 5 of the Indian Stamp Act, 1899, combining several distinct matters in one document does not reduce or avoid duty; each matter is charged as if documented separately.

  1. AOnly the duty on the matter that attracts the higher duty is payable
  2. BOnly the duty on the first matter in the instrument is payable
  3. CThe aggregate of the duties that separate instruments for each distinct matter would attractCorrect
  4. DThe instrument is exempt because it is a single document

Explanation

Section 5 provides that an instrument comprising or relating to several distinct matters is chargeable with the aggregate of the duties that separate instruments for each matter would attract. Choosing only the higher or first duty ignores this aggregation rule. A single document gives no exemption.

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