Maharashtra Stamp Act Amendment: Key Changes Effective 14.10.2024

In a significant move, the Maharashtra Government has revised the stamp duty rates under the Maharashtra Stamp Act, 1958. Effective from 14th October 2024, these changes are part of the government's broader strategy to simplify the stamp duty structure and boost state revenue by an estimated ?2,000 crore. Here’s a breakdown of the major updates:

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1. Minimum Stamp Duty Increased to 500/-

The minimum chargeable stamp duty across various documents, such as affidavits, agreements, and appraisements, has been increased to ?500. This is a substantial jump from the previous rates of ?100 or ?200. The increase applies across 12 types of documents.

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2. Articles of Association: Higher Max Cap of 1 crore

The stamp duty on the Articles of Association has been revised upward, now charged at 0.3%, with a maximum cap of ?1 crore. This represents a significant increase from the earlier rate of 0.2%, capped at ?50 lakhs. Companies executing changes to their Articles of Association need to be mindful of this revised cost.

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3. Arbitral Awards: New upward Sliding Rates

Arbitral awards, particularly those involving movable property, will now be taxed based on the value of the property:

• For awards up to ?50 lakhs, the duty is 0.75%.
• For awards between ?50 lakhs and ?5 crores, it is ?37,500 + 0.5% of the amount above ?50 lakhs.
• For awards exceeding ?5 crores, the duty is ?2,62,500 + 0.25% of the amount above ?5 crores.

For immovable property, the award will be taxed at the same rate as a conveyance under Article 25(b).

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4. Partnership Deeds: Significant Duty Increase to 50,000

For partnership deeds where the share contribution exceeds ?50,000, the stamp duty has been raised to a maximum of ?50,000, up from the earlier maximum of ?15,000. This will particularly affect business partnerships involving substantial contributions.

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5. Changes to Works Contracts

The stamp duty on works contracts has also been adjusted. Contracts valued at:

• Up to ?5 lakhs will attract a flat duty of ?500.
• Above ?5 lakhs and up to ?10 lakhs will be charged ?500 + 0.3% on the amount above ?5 lakhs.
• Above ?10 lakhs will be charged ?1,000 + 0.1% on the amount above ?10 lakhs.

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6. Broader Economic Impact

The state’s revenue department has indicated that these changes are aimed at boosting revenue while simplifying the overall stamp duty process. The government expects to increase its earnings by ?2,000 crore this year, contributing to the annual revenue target of ?60,000 crore from stamp duty

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7. Summary of Changes in Stamp Duty

Here is a comprehensive table summarizing the changes in stamp duty across various instruments:

Conclusion

With the introduction of these amendments, businesses and individuals must adjust to the new stamp duty regime. Whether you are drafting partnership agreements, registering arbitral awards, or executing articles of association, it’s essential to plan ahead to accommodate these increased costs.

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