Draft Indian Stamp Bill, 2023
The Finance Ministry invited public comments on the draft Indian Stamp Bill, 2023. The Bill aims to modernize stamp duty provisions and replace the 1899 Stamp Act.
Updating Archaic Policies
The Indian Stamp Act 1899 is an old fiscal law governing taxes levied via stamps on transaction instruments. It predates the Constitution. Stamp duties are collected by states per the Constitution despite imposition by the Central Government.
The 1899 Act has been amended periodically to enable a more modern stamp duty system. But many original provisions have become redundant or inoperative. There is a clear need to re-orient the outdated legislation for present conditions.
What the Stamp Act Entails
The Indian Stamp Act imposes levies in the form of stamps on legal agreements and documents that record financial transactions. These include property sale agreements, lease contracts, power of attorney papers etc. Rates differ based on the document type.
Revenue Collection for States
While the Central Government defines stamp duty rates, revenues accrue to State Governments where the duties are paid. It represents an important source of tax collection empowering states to fund welfare programs and public infrastructure projects.
Plugging Duty Evasion
The stamp law aims to prevent tax evasion by making documentation of transactions mandatory for legal validity and enforceability. Lack of stamps leads to document inadmissibility in courts. This compels stamping.
Key Reasons for New Stamp Law
The proposed Indian Stamp Bill 2023 will align the stamp duty regime to current realities and objectives. This necessitates repealing the 1899 Stamp Act in its entirety and enacting fresh legislation for the contemporary context.
Proposed Changes to Boost Ease
Proposed legislative changes in the new Indian Stamp Bill will likely ease payment modes and access. Introduction of consolidated duty slabs across states could provide uniformity. Digital property registration may also facilitate convenience.
Curbing Duty Avoidance Tactics
The Bill may curb tactics used to avoid duty like undervaluing property sales. It could mandate links between sale prices and circle rates to prevent under-reporting. Strong anti-evasion measures will safeguard revenue.
Bolstering the Digital Economy
An updated all-digital stamp duty system will propel India’s digital economy. Electronic documentation and registration via a single portal or platform will enhance transparency and efficiency.
Category: Legal & Constitution Current Affairs