stamp duty on assignment deed

Stamp Duty on Assignment of Receivables

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Updated as on 07.05.2024

The table below provides the rate of stamp duty applicable on assignment of receivables in major states across India:

[1] Notification G.O.Ms. No.305 dated 29.03.2004 issued by Registration and stamps Department, Government of Andhra Pradesh. This shall apply to ARC’s.

[2] Notification S.O.No.-1/M1-126-2004/2904 dated 29.12.2004 issued by Department of Registration, Government of Bihar. This shall apply to ARC’s.

[3] Notification No./F10-9-2004-C.T.-(R) –V-(32) dated 28.02.2004 issued by Financial and Planning Department {Commercial Tax (Registration) Department}, Government of Chhattisgarh.

[4] http://delhi.gov.in/wps/wcm/connect/DoIT_Revenue/revenue/home/registration+acts+and+rules/manuals%2Cnotifications%2Corders/reg260209

[5] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[6] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[7] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=166

[8] 1.  Notification No. Stamp-6/05/35723/R. dated 31.08.2005 issued by Revenue Department, Government of Orrisa. 2. Notification No. Stamp-6/05/35723/R. dated 31.08.2005 issued by Revenue Department, Government of Orrisa.

[9] http://igrs.rajasthan.gov.in/writereaddata/Portal/Images/pdf/notification-dated-26062015.pdf

[10] Notification No.K.N.5-1023/11-2005-500(137)-2003 dated 15.03.2005 as amended by No.K.N.5-1389/11-2005-500(137)/2003 dated 29.03.2005 issued by Kar Evam Nibandhan Anubhag-5, Government of Uttar Pradesh.

[11] Notification No.2307-F.T. dated 02.07.2004 issued by Finance (Revenue) Department, Government of West Bengal.

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can you please provide copy of the Notification No.2307-F.T. dated 02.07.2004 issued by Finance (Revenue) Department, Government of West Bengal.

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Drafting a Deed of Assignment

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Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom. Also note: This is not legal advice.

Introduction

A Deed of Assignment is a vital legal document used to transfer rights, interests or assets between parties. It is regularly used in business transactions, and often regarding real estate or intellectual property. A well-crafted deed of assignment can protect both sides from potential legal disputes, ensuring that everyone involved understands their obligations and responsibilities.

The Genie AI team has seen many instances where having a valid deed of assignment can make all the difference - without it businesses could be exposed to considerable risk. That’s why we offer free templates and step-by-step guides to help those wishing to draft their own deed.

When creating a Deed of Assignment it is important to take the specific circumstances into account - any changes or additions should be accurately documented and agreed by all involved parties beforehand. Furthermore, it is essential that the terms are clearly written out in an unambiguous way so every party knows exactly what they have signed up for. Beyond protecting both sides’ interests, this type of agreement can also be used for copyright assignments, leases, debt transfers and trusts.

Before signing on the dotted line it’s also critical that executing such documentation is done properly - all parties must sign in the presence of a witness who will also affix their signature and date the document accordingly. Once this process has been completed filings must then be made with any relevant government authorities whenever necessary (especially in cases involving real estate or intellectual property transfers).

In summary, drafting a Deed of Assignment not only safeguards everyone’s best interests but also provides additional benefits depending on its use case - reading through our step-by-step guidance below should provide you with more information on how to access our template library today and start benefitting from its advantages without needing to sign up for an account with Genie AI first!

Definitions (feel free to skip)

Legal Binding: When a legally binding document is used, it means that all parties involved are legally obligated to follow the terms and conditions set forth in the document.

Assignor: The assignor is the person who is transferring rights, interests or assets to someone else.

Assignee: The assignee is the person who is receiving the rights, interests or assets from the assignor.

Witness: A witness is an independent third-party who is present when a document is signed, in order to ensure that the process is completed in a secure and legally binding manner.

Stamp: A stamp is an official seal or mark that is used to verify and authenticate a document.

Tax: A tax is a sum of money that is paid to a government or public authority.

Duty: Duty is an obligation or responsibility assigned to someone.

Defining the Deed of Assignment

What is a deed of assignment and what is its purpose, parties involved, who needs to be involved in the making of a deed of assignment, drafting the deed, determine what kind of deed of assignment needs to be drafted, consider the subject matter to be assigned in the deed, research the legal requirements for the kind of deed to be drafted, draft the deed of assignment in accordance with the legal requirements, executing the deed, check that the parties to the deed are correctly identified, confirm that the deed is correctly signed and dated by all parties, confirm that the deed is witnessed by an independent third party, have the deed of assignment properly executed by all parties, registration, determine whether the deed of assignment needs to be registered, if registration is necessary, confirm the registration procedures, take necessary steps to register the deed of assignment, considerations, consider any applicable tax or stamp duty implications of the deed of assignment, consider any restrictions or limitations on the rights being assigned, consider whether the deed of assignment needs to be registered in any public records, common mistakes, not accurately identifying all of the parties to the deed, not having the deed properly executed by all parties, not having the deed witnessed by an independent third party, not considering any applicable tax or stamp duty implications, not considering any applicable restrictions or limitations on the rights being assigned, record keeping, ensure that the original deed of assignment is securely stored, create a digital copy of the deed and store it in a secure manner, review the deed of assignment to ensure accuracy, confirm that all steps have been completed correctly, seek advice from legal professionals if necessary, get started.

• Establish the parties involved in the Deed of Assignment
• Identify the property or service being assigned
• Specify the terms of the assignment
• Ensure the Deed of Assignment is properly witnessed
• Check that all signatures are valid

When you have completed the steps above, you will have successfully defined the Deed of Assignment and can proceed to the next step.

• A deed of assignment is a legal document that is used to transfer the rights and responsibilities of one party (the assignor) to another party (the assignee)
• It is used to transfer contractual rights and obligations between parties
• It should include information such as the names of the parties, the date of the assignment, and the description of the rights transferred
• You will know that you have completed this step when you have an understanding of what a deed of assignment is and why it is used.
• Identify the party transferring their rights (the assignor) and the party receiving the rights (the assignee)
• Draft the deed in the name of both parties, including full names and contact details
• Ensure the deed is signed by both the assignor and assignee
• Once the deed is signed, the parties should exchange copies of the document

Once the assignor and assignee have been identified and the deed has been drafted and signed, you can check this step off your list and move on to the next step.

• Identify the parties involved in the Deed of Assignment. This would typically include the assignor (the party transferring their rights or interest) and the assignee (the party receiving the rights or interest).
• Ensure that all parties involved have the legal capacity to enter into a contract.
• When all parties have been identified and their legal capacity has been verified, you can check this step off your list and move on to drafting the Deed.
• Read the applicable laws in your jurisdiction to determine the required language and structure of the Deed of Assignment
• Gather the necessary information on the parties, the asset being assigned, and other relevant details
• Draft the Deed of Assignment, taking into account all the necessary details
• Make sure the language is clear and unambiguous
• Have the Deed of Assignment reviewed by a legal professional
• When the Deed of Assignment has been drafted and reviewed, you can move on to the next step.
• Identify the type of assignment that needs to be drafted and the legal requirements that need to be satisfied
• Consider the purpose of the Deed and the rights and obligations of the parties to the Deed
• Determine if the Deed is for an absolute or conditional assignment
• Consider if the Deed should be an express or implied assignment
• Determine if the Deed needs to be in writing or if it can be oral
• Check the applicable laws in your jurisdiction to ensure that you are drafting a valid Deed
• Check if there are any additional requirements that need to be included in the Deed

When you can check this off your list: Once you have identified the type of assignment and the relevant legal requirements, you can move on to considering the subject matter to be assigned in the Deed.

• Identify the subject matter of the Deed of Assignment, such as a patent, trademark, copyright, or other intellectual property
• Assess the value of the subject matter and any associated liabilities
• Understand the relationship between the assignor and assignee
• Have all necessary documents, such as a purchase agreement, to provide more detail about the assignment

Once you have identified the subject matter of the Deed of Assignment, assessed its value, understand the relationship between the assignor and assignee, and gathered any additional documents, you can move onto the next step of researching the legal requirements for the kind of Deed to be drafted.

• Research the relevant legislation, case law, and other materials related to the Deed of Assignment to be drafted
• Consult with a lawyer familiar with the relevant law to understand the requirements
• Take detailed notes on the legal requirements that must be adhered to in the Deed of Assignment
• Once you have all the necessary information, double-check that you understand the requirements before moving on to the next step.
• Prepare the text of the Deed, ensuring that all relevant information regarding the parties, the subject matter, and the consideration is included
• Check to make sure the language conforms with relevant laws and regulations
• Have the Deed reviewed by a solicitor to ensure that it complies with all legal requirements
• Once the Deed has been approved by a solicitor, have the parties sign the document
• Once the Deed has been signed by both parties, make multiple copies and ensure each party has a copy
• This step is complete once the Deed has been signed and each party has a copy of the document.
• Ensure both parties sign the Deed of Assignment in the presence of two witnesses who are over the age of 18 and not parties to the Deed
• Have both parties sign the deed in the presence of two witnesses and have the witnesses sign the deed to attest to witnessing the signature of the parties
• Check that the parties have signed the Deed in the presence of the witnesses by noting the signatures and the dates of signature in the execution clause of the Deed
• Once the Deed has been executed, have the parties date and keep a copy of the Deed in a secure place
• You will know that you have completed this step when the Deed has been properly executed by the parties in the presence of two witnesses.
• Identify all parties to the Deed and verify that their details are correct.
• Ensure that all parties to the Deed are identified in the document and that the details of each party are accurate and up-to-date.
• Check that the names, addresses and contact details of each party are correct.
• Once you have verified that the parties and their details are correctly identified, you can move on to the next step.
• Check that all parties have signed the Deed in the correct place, and that the date of signature is correct
• Ensure that each party has signed the Deed in the presence of an independent witness
• Check that all parties have signed the Deed with their full name and title, if applicable
• Confirm that the date of signature is correct and that all parties have signed on the same date
• Once you have verified that all parties have correctly signed and dated the Deed, you can proceed to the next step.
• Ensure that the Deed is witnessed by an independent third party who is not a party to the Deed.
• Ask the third party to sign the Deed and provide their name, address, occupation and date of signing.
• Check that the third party has signed and dated the Deed.
• Once the above is complete, you can check this step off your list and move on to the next step.
• Obtain signatures from all parties on the deed of assignment, ensuring that each party signs in the presence of a witness
• Have an independent third party witness each party’s signature
• Ensure that all parties have a valid form of identification, such as a driver’s license or passport, available for inspection by the witness
• Ensure that all parties sign the deed of assignment in the presence of the witness
• Obtain the witness’ signature, confirming that all parties signed in the presence of the witness
• You will know this step is completed once all parties have signed the deed of assignment and the witness has signed confirming they were present during the signing.
• Obtain a copy of the executed Deed of Assignment from all parties
• Contact the relevant state or territory office to determine whether the Deed of Assignment needs to be registered
• If registration is required, complete the necessary forms, pay the registration fee, and submit the required documents
• Once the Deed of Assignment is registered, the registrar will issue a certificate of registration
• Check off this step when you have received and reviewed the certificate of registration.
• Research the applicable laws and regulations in the relevant jurisdiction to decide if the Deed of Assignment needs to be registered
• Consult a legal professional if unsure
• When you have the answer, you can move on to the next step.
• Confirm what type of Deed of Assignment requires registration with the relevant government agency or registry.
• Research the registration procedures and the requirements you must meet in order to register the Deed of Assignment.
• Obtain any fees or additional documents that are necessary to complete the registration process.
• Ensure that all parties to the Deed of Assignment understand the registration process and the requirements for completing it.

You can check off this step once you have researched and confirmed the registration procedures for the Deed of Assignment.

• Gather the necessary documents for registration, such as the Deed of Assignment, supporting documents, and the applicable fee
• Visit the registration office to register the Deed of Assignment
• Submit the necessary documents to the registration office
• Pay the applicable fee
• Obtain a copy of the registered Deed of Assignment
• Upon completion of the above steps, you can check this off your list and move on to the next step.
• Review and understand the nature of the rights and obligations being assigned
• Determine if there are any restrictions or limitations in the assignment
• Assess if any approvals are needed from third parties before the assignment is valid
• Confirm that the assignor has the right to assign the interest being transferred
• Check to see if the assignee has the necessary capacity to accept the assignment
• Analyze if the assignment is subject to any applicable laws or regulations
• Determine if any additional documentation is needed to support the assignment
• Once you have considered all of the above, you can proceed with drafting the Deed of Assignment.
• Check with your local taxation authority or a qualified tax professional to see if the Deed of Assignment is subject to any taxes or stamp duty.
• Ensure that the Deed of Assignment includes any required taxes or stamp duty payments.
• Check to see if the tax or stamp duty implications vary by jurisdiction.
• Once you’ve considered the tax or stamp duty implications, you can move on to the next step.
• Identify any restrictions or limitations that could affect the transfer of rights in the Deed of Assignment
• Consider whether there are any legal restrictions that must be observed in the transfer of the rights being assigned
• Research any relevant industry standards or regulations to ensure that the restrictions or limitations on the rights being assigned are compliant
• Ensure that the Deed of Assignment clearly outlines the restrictions or limitations of the rights being assigned
• When all restrictions or limitations on the rights being assigned are taken into consideration, checked for compliance and outlined in the Deed of Assignment, this step is complete.
• Consider whether the Deed of Assignment needs to be registered with any government or public agencies.
• Determine if any registration is required or optional.
• Research the relevant regulations and laws to ensure that the assignments are properly recorded.
• Check any local requirements or restrictions.
• Once you have determined that the Deed of Assignment does or does not need to be registered, you can move on to the next step in the process.

• Read over the Deed of Assignment twice to make sure you’re accurately identifying all of the parties to the Deed. Make sure you include the full names and addresses of the assignor and assignee, as well as any other relevant parties. • Check that the legal description of the subject property is accurate. • Ensure that the consideration (the amount being exchanged for the assignment) is stated clearly and accurately. • Make sure that the names of the initial parties to the Deed are also included in the recitals. • Ensure that the recitals and the express terms of the Deed are consistent with one another. • Make sure that the Deed is signed, notarized, and delivered in accordance with state law.

Once you’ve completed the above steps, you can check off this task and move on to the next step in the guide.

• Identify the assignor and assignee. The assignor is the party transferring their rights and the assignee is the party receiving the rights.
• Check all of the details are correct. This includes the names, addresses and other contact information for both parties.
• Draft the deed to ensure that the assignor and assignee are accurately identified.
• You can check this off your list and move on to the next step once you have confirmed that the assignor and assignee have been accurately identified in the deed.
• Ensure that all parties to the Deed have read, understood and agreed to the terms and conditions of the agreement.
• Have all parties affix their signature to the Deed and the accompanying documents.
• Check that all the signatures are dated and in the presence of a witness.
• When all parties have properly executed the Deed, you can move on to the next step.
• Ensure all parties have signed the Deed in the presence of a witness.
• The witness must be an independent third party who is not a party to the Deed.
• The witness must sign each page of the Deed that contains a party’s signature.
• The witness must also include their full name, address and occupation on the Deed.
• Once all of the above requirements are met, then you can check this off your list and move on to the next step.
• Determine the applicable taxes or stamp duty implications for the Deed of Assignment.
• Research any applicable taxes or stamp duty fees for the Deed of Assignment.
• Calculate the applicable taxes or stamp duty fees for the Deed of Assignment.
• Make sure to include the applicable taxes or stamp duty fees in the Deed of Assignment.

Once you have determined the applicable taxes or stamp duty implications for the Deed of Assignment, and included them in the Deed of Assignment, you can move on to the next step.

• Determine the rights that you are assigning and review any applicable laws or regulations to ensure that the assignment of such rights is permitted.
• Consider any applicable contractual restrictions or limitations on the rights being assigned, such as any applicable confidentiality obligations or restrictions on the transfer of rights.
• Once you have determined that the assignment of the rights is permitted and there are no applicable restrictions or limitations, you can proceed to the next step of recording keeping.
• Create a record of the Deed of Assignment, including the date it was executed, by each party
• Maintain a copy of the Deed of Assignment in a secure place
• Record any additional related documents, such as any security documents, release documents, or other agreements
• When all of the above have been done, you can check this off your list and move on to the next step.
• Obtain a physical copy of the original Deed of Assignment
• Ensure the original Deed is signed by both parties
• Keep the original Deed in a safe and secure place, such as a locked filing cabinet or safe
• Make sure the document is stored in a location that is accessible to both parties
• Ensure that the original Deed is not destroyed or tampered with in any way

You can check this off your list and move on to the next step once the original Deed of Assignment is safely stored in a secure location.

• Scan or take a digital photo of the original Deed of Assignment and save it to a secure location.
• Ensure that the digital copy is readable and clearly displays all of the information contained in the original document.
• Ensure that the digital copy is stored in a secure location, preferably on a cloud-based storage system or other secure server.
• Make sure that only authorized personnel have access to the digital copy of the Deed.
• When finished, you will have created a digital copy of the Deed and stored it in a secure manner.
• Read over the Deed of Assignment to ensure accuracy
• Make sure all details are correct, and all parties are named
• Verify that all signatures are complete and accurate
• Make sure the date of the assignment is correct
• Check that the document is formatted and laid out correctly
• Once you are satisfied with the accuracy of the Deed of Assignment, you can move on to the next step.
• Read through the entire document to make sure all the information is correct
• Double check that the names and details of the parties involved are spelled correctly
• Ensure that all the dates are accurate, and that any and all parties have signed the deed in the right places
• Check that the terms and conditions in the deed are consistent with the agreement between the parties
• When you have verified all the details, you can check this off your list and move on to the next step.
• Check the Deed of Assignment to ensure that all required elements are present, including accurate information and signatures of all parties.
• Verify that any and all attachments to the Deed of Assignment are included and accurate.
• Ensure that all dates, signatures, and other pieces of information are accurate and up-to-date.
• Once you’ve confirmed that all of the steps have been completed correctly, you can move on to the next step.
• Seek professional advice from a lawyer or other legal professional to ensure that the deed of assignment is legally binding and enforceable.
• Request that the legal professional checks that all steps have been completed correctly, and that the deed of assignment meets all requirements under local law.
• Ask the legal professional to provide you with written advice on any changes or revisions that may be necessary to make the deed of assignment valid and enforceable.
• Once the legal professional has confirmed that the deed is legally sound, you can check off this step and proceed with the next one.
• Research legal professionals who are able to provide advice and assistance with the drafting of a deed of assignment
• Contact the legal professionals to discuss the specific requirements and details of the deed of assignment
• Ask the legal professionals if they are able to provide advice and assistance with the deed of assignment
• Receive advice from the legal professionals and make changes to the deed of assignment accordingly
• Once you are satisfied with the changes to the deed of assignment, you can move on to the next step.

Q: Does a Deed of Assignment need to be signed?

Asked by John on April 23rd 2022. A: Yes, a Deed of Assignment needs to be signed by both the assignor and the assignee in order for it to be legally binding. The signatures should be witnessed and dated, and should be in front of an independent witness who is not related to either party. It is also important to include the relevant clauses and provisions in the deed, as these will set out the rights and obligations of each party.

Q: What is the difference between an assignment and a novation?

Asked by Sarah on July 29th 2022. A: An assignment is a transfer of rights or obligations from one party to another, while a novation is a transfer of rights or obligations from one party to another with the consent of all parties involved. An assignment does not necessarily require the consent of all parties, while a novation always requires the consent of all parties. Additionally, an assignment can transfer rights or obligations without necessarily extinguishing any pre-existing agreements, while a novation extinguishes any pre-existing agreements.

Q: Is a Deed of Assignment legally binding in different jurisdictions?

Asked by Tyler on October 17th 2022. A: Yes, a Deed of Assignment can be legally binding in different jurisdictions, though the exact requirements for validity may differ from jurisdiction to jurisdiction. In general, however, a Deed of Assignment needs to be signed by both parties and witnessed by an independent third party in order for it to be legally binding. Additionally, the deed should include all relevant clauses and provisions that are applicable in each jurisdiction.

Q: Are there any tax implications when drafting a Deed of Assignment?

Asked by Emma on January 15th 2022. A: Yes, there are tax implications that need to be taken into account when drafting a Deed of Assignment. Depending on the jurisdiction and specific tax laws, there may be tax implications for both parties if they are transferring rights or obligations under the deed. It is important to seek professional tax advice before entering into any agreement that involves transferring rights or obligations between parties as this could have significant financial implications for all involved.

Q: Do I need legal advice when drafting a Deed of Assignment?

Asked by Jacob on June 5th 2022. A: While it is not necessary to seek legal advice when drafting a Deed of Assignment, it is generally recommended in order to ensure that all relevant legal requirements are satisfied and that all involved parties are aware of their rights and obligations under the deed. It is also important to make sure that all language used in the deed is clear and unambiguous so that it can easily be understood by all parties involved.

Q: How can I ensure that my Deed of Assignment is valid?

Asked by Michael on August 28th 2022. A: In order for your Deed of Assignment to be valid, it must meet certain legal requirements which vary between jurisdictions. Generally speaking, your deed should include all relevant clauses and provisions applicable in your jurisdiction as well as signatures from both parties which should be witnessed by an independent third party who is not related to either party involved. Additionally, any language used within the document should be clear and unambiguous so that it can easily be understood by all involved parties.

Q: What information do I need to provide when drafting a Deed of Assignment?

Asked by Ashley on November 10th 2022. A: When drafting a Deed of Assignment, you will need to provide information about both parties involved such as their names, addresses, contact details and any other relevant information required under applicable laws in your jurisdiction. Additionally, you will need to include any relevant clauses or provisions applicable in your jurisdiction which will set out the rights and obligations of each party under the deed as well as any other information required for the document to be legally binding.

Q: What are common mistakes made when drafting a Deed of Assignment?

Asked by Joshua on February 20th 2022. A: One common mistake made when drafting a Deed of Assignment is failing to include all relevant clauses or provisions applicable in your jurisdiction which set out the rights and obligations of each party involved in the agreement. Additionally, failing to have the document signed by both parties or witnessed by an independent third party can render the document invalid or unenforceable under applicable law in some jurisdictions. Moreover, using ambiguous language within the document can also lead to misunderstandings and disputes further down the line which could be avoided if clear language was used throughout the document instead.

Example dispute

Lawsuit referencing a deed of assignment.

• The plaintiff may raise a lawsuit if they have been wronged by the defendant in a way that is outlined in the deed of assignment.
• For example, the deed of assignment may outline that the defendant is responsible for paying a certain amount of money to the plaintiff, and the defendant has failed to do so.
• The plaintiff may also raise a lawsuit if the defendant has failed to adhere to any other obligations laid out in the deed of assignment.
• The plaintiff would need to prove that the defendant has breached the deed of assignment in order to win the lawsuit.
• If successful, the plaintiff may be able to obtain a judgment in their favor, which may require the defendant to pay the plaintiff the money they are owed.
• In addition, the plaintiff may be able to seek other damages, such as punitive damages, if the breach of the deed of assignment was particularly egregious.
• Depending on the severity of the breach, the plaintiff may also be able to seek an injunction to prevent the defendant from continuing to breach the deed of assignment.
• Settlement of the dispute may also be possible, wherein the defendant agrees to pay a certain amount of money to the plaintiff, or agrees to adhere to the obligations laid out in the deed of assignment.

Templates available (free to use)

Deed Of Assignment For Rent Deposits Occupation Lease Deed Of Assignment Of Benefit Of Claim For The Freehold Or Extended Lease House Under Section 8 Or Section 14 Deed Of Assignment Of Equitable Interest In Residential Land Deed Of Assignment Of Goodwill And Intellectual Property Rights Transfer Of A General Partnership To An Llp Deed Of Assignment Of Property Sale Benefits [Section 42 Deed Of A

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The stamp duty payable during assignation of debt by Asset Reconstruction Companies – By Adv. Haaris Moosa

In Phoenix Arc Private Limited, Mumbai Vs. M/S. Cherupushpam Films Pvt Limited, Ernakulam (2023) ibclaw.in 48 NCLT (hereafter Phoenix ARC) the question raised before the NCLT, Kochi Bench was whether stamp duty has to be paid on a deed assigning debt to an Asset Reconstruction Company (ARC).  The NCLT Kochi Bench has held that the ARC is bound to pay the appropriate stamp duty as per the relevant state legislation, in this case the Kerala Stamp Act, 1959 (KSA, 1959

The stamp duty payable during assignation of debt by Asset Reconstruction Companies

Adv. Haaris Moosa

Stamping has been used by litigators as a deus ex machina for long. Insufficient stamping determines the fate of a case quite independent of its facts or merits. The interplay of the stamping legislations with the Insolvency and Bankruptcy Code, 2016 (IB Code, 2016), has not been adequately analysed by either courts or tribunals.  Stamping in India is regulated by both Union and State legislations since it is covered by Entry 91 of the Union List and Entry 63 of the State List. The Union legislation is the Indian Stamp Act, 1899 (ISA, 1899) 1 and almost all the States have their own stamping statutes. The stamping legislations of old vintage have stood their ground even with the coming of avant garde legislations meant to streamline commercial transactions like the Arbitration and Conciliation Act, 1996, SARFAESI Act, 2002, Companies Act, 2013 and now the IB Code,2016.

In Phoenix ARC Private Limited, Mumbai Vs. M/S. Cherupushpam Films Pvt Limited, Ernakulam (2023) ibclaw.in 48 NCLT  (hereafter Phoenix ARC ) the question raised before the NCLT, Kochi Bench was whether stamp duty has to be paid on a deed assigning debt to an Asset Reconstruction Company (ARC).  The NCLT Kochi Bench has held that the ARC is bound to pay the appropriate stamp duty as per the relevant state legislation, in this case the Kerala Stamp Act, 1959 (KSA, 1959) 2 .  The Hon’ble NCLT held that the applicability of KSA 1959 2 is not ruled out by the prescription under Section 8F of the Indian Stamp Act, 1899 (ISA, 1899) which exempts ARCs from paying any stamp duty on “ any agreement or other document for transfer or assignment of rights or interest in financial assets of banks or financial institution s” covered under section 5 of the SARFAESI Act, 2002.

KSA, 1959 in section 25, declares the assignment of a debt to be a conveyance, and the duty payable has been pegged at 8%. In the instant case, the Tribunal found that the assignment deed was to be stamped at 8% as per Section 25 of KSA, 1959 since the agreement was made in Kerala. Interestingly in the instant case, the stamp duty as per KSA, 1959 comes to Rs. 6,33,99,500/- while the assignment deed was found to be made on a non-judicial stamp paper of Rs. 500/-. Consequently, the Tribunal found the assignment deed to be unenforceable for insufficient stamping. Phoenix ARC breaks new ground in holding that the assignment of a debt to an Asset Reconstruction Company is liable to be stamped as per the concerned state stamping legislation.

In Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta [2019] ibclaw.in 07 SC  (hereafter Essar Steel ) the supreme court confirmed the decision of the NCLAT, [2019] ibclaw.in 109 NCLAT in affirming the decision of the NCLT in rejecting an application that suffered from insufficient stamping. And held that “Further, the submission of the Appellants that they have now paid the requisite stamp duty, after the impugned NCLAT judgment, would not assist the case of the Appellants at this belated stage. These appeals are therefore dismissed.” 3 Quite to the contrary, in Praful Nanji Satra v. Vistra ITCL (India) Ltd. (2022) ibclaw.in 550 NCLAT , the NCLAT went on to reject an argument for dismissal of an application for insufficient stamping, holding that the only issue that the NCLT in IBC proceedings can look at is whether there has been a default, and nothing further. It was also held that insufficient stamping is a curable defect. The effect of insufficient stamping has attracted contradictory judgments from the NCLAT and the Supreme Court. However, Phoenix ARC follows the correct law laid down by the Supreme Court in Essar Steel .

It is to be noted that proceedings under Code are non-adversarial. Any applicant seeking to initiate corporate insolvency proceedings is required to produce documents that satisfy the Adjudicating Authority (the NCLT) proving the default committed by the corporate debtor. Such an applicant is also required to ensure that the financial contracts on which they rely are legally sound and are not truncated. While structuring true sale transactions for assignment of debt (standard assets or NPA), compliance under the applicable stamping legislations must be ensured to avoid legal complications.

Disclaimer:  The Opinions expressed in this article are that of the author(s). The facts and opinions expressed here do not reflect the views of IBC Laws ( http://www.ibclaw.in ). The entire contents of this document have been prepared on the basis of the information existing at the time of the preparation. The author(s) and IBC Laws ( http://www.ibclaw.in ) do not take responsibility of the same. Postings on this blog are for informational purposes only. Nothing herein shall be deemed or construed to constitute legal or investment advice. Discussions on, or arising out of this, blog between contributors and other persons shall not create any attorney-client relationship.

Follow for daily updates:

• < https://legislative.gov.in/sites/default/files/A1899-2.pdf > [ ↩ ]
• < https://keralaregistration.gov.in/fileUploads/The%20Kerala%20Stamp%20Act.pdf > [ ↩ ][ ↩ ]
• [2019] ibclaw.in 07 SC , para 99 [ ↩ ]

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Stamp Duty Document Guide

These stamp duty document guides have been prepared to assist in calculating the stamp duty payable on the documents available for self-determination on RevenueSA Online and those that must be submitted for the assessment of the Commissioner of State Taxation. It does not replace nor override the legislative requirements of the Stamp Duties Act 1923 .

In these Guides:

• all references made to sections relate to the Stamp Duties Act 1923 , unless otherwise specified;
• a reference to the Commissioner is a reference to the Commissioner of the State Taxation; and
• the term ‘document’ is used in place of the word ‘instrument’, to facilitate easy reading.

Self Determination Assessment by the Commissioner (Opinion) Section 67 (PDF 336KB) Section 71E (PDF 168KB) Guide Glossary

Self Determination

A document should be read thoroughly to determine the true nature of its intent in order to determine which document type applies. Documents not listed in this Guide must be submitted to the Commissioner for assessment.

If GST is included as part of consideration, stamp duty is payable on the GST inclusive amount (Section 15A).

If a conveyance is part of a series with other conveyance documents (that is, the conveyances arise from a single contract of sale or together form or arise from one transaction or a series of transactions), all documents must be self-determined concurrently and Section 67 applied. If documents subject to the provisions of Section 67 are being self-determined separately they must be submitted to the Commissioner for assessment together with details of the other transactions in the series. Refer to the Stamp Duty Document Guide (Section 67) (PDF 167KB) for further information.

If you have any enquiries relating to the content of this guide or require advice on the suitability of self-determining a document via RevenueSA Online you should contact RevenueSA.

View the complete guide (PDF 1,757KB)

View the documents that can be self-determined in the boxes below, including if Commonwealth Reporting is required.

Declaration of Trust (PDF 161KB)

Transfer of Lease – Pursuant to Conveyance of Land (PDF 162KB)

Conveyance of Business

SA Business (Pre 18/06/2015) (PDF 267KB)

Conveyance of Land

Assignment Land Contract (PDF 286KB)

Assignment Land Contract – Qualifying Land (PDF 332KB)

Creation of Life Estate (PDF 192KB)

Easement (PDF 162KB)

Easement – Qualifying Land (PDF 216KB)

Ex-Service Persons Concession (PDF 193KB)

Lease Premium (PDF 128KB)

Lease Premium – Qualifying Land (PDF 142KB)

Off the Plan Concession (PDF 356KB)

Option to Purchase (PDF 129KB)

Option to Purchase – Qualifying Land (PDF 119KB)

Qualifying Land (PDF 356KB)

Residential/Primary Production (PDF 357KB)

Road Closure (PDF 156KB)

Road Closure – Qualifying Land (PDF 171KB)

Surrender of Lease – Lessor Pays (PDF 121KB)

Surrender of Lease – Lessor Pays – Qualifying Land (PDF 101KB)

Surrender of Life Estate (PDF 157KB)

Surrender of Remainder Estate (PDF 147KB)

Transfer of Lease (PDF 197KB)

Transfer of Lease – Qualifying Land (PDF 246KB)

Conveyance of Land - Not Chargeable

Change in Tenancy - No Change in Ownership Share (PDF 149KB)

Surrender of Lease – Lessee Pays (PDF 162KB)

Surrender of Lease – No Consideration (PDF 130KB)

Conveyance of Land - Exemptions

Certified Domestic Partnership Agreement Pursuant to 71CBA (PDF 150KB)

Bankrupts Pursuant to 71CD (PDF 157KB)

Liquidator in Specie Distribution (PDF 193KB)

Pursuant to 71CA (PDF 377KB)

Pursuant to 71CB (PDF 271KB)

Pursuant to 71CBA (PDF 220KB)

Pursuant to a Will or Intestacy (PDF 200KB)

To exempt authority (PDF 157KB)

To Religious/Charitable Body (PDF 159KB)

Trustee to Trustee (PDF 178KB)

Family Farm Pursuant to Sec 71CC (PDF 137KB)

Conveyance of Other

Surrender of Interest in a Trust by a Family Member (PDF 159KB)

Family Law Agreement Pursuant to 71CA (PDF 153KB)

Appointment of New Trustee (PDF 123KB)

Deed (PDF 126KB)

Transfer of Mortgage (PDF 124KB)

Agreement (PDF 117KB)

Exemptions - Transfer of Motor Vehicles

Pursuant to a Will or Intestacy (PDF 140KB)

Pursuant to 71CB (PDF 204KB)

Not Chargeable

Lease entered into on or after 1/7/2004 (PDF 192KB)

Non Dutiable Mortgage / Discharge of Mortgage or Encumbrance (PDF 127KB)

Amendment of a Strata Plan (PDF 126KB)

Amendment of Deposited Community Plan (PDF 126KB)

Deposit of a Strata Plan (Same Parties) (PDF 112KB)

Deposit Plan of Community Division (PDF 197KB)

Easement – Same Parties, No Consideration (PDF 128KB)

Road Closure – Same Parties, No Consideration (PDF 122KB)

RTC with no transactions (PDF 168KB)

Extension of Mortgage (PDF 148KB)

Assessment by the Commissioner (Opinions)

While the Stamp Duty Document Guide (Opinion) is a comprehensive list it is not possible to anticipate and describe every document that will be required to be submitted for assessment of duty by the Commissioner.

A considerable number of document classes are not required to be submitted for an assessment of duty. Taxpayers/agents can self-determine duty, generate a Certificate of Stamp Duty and pay the duty on the documents on RevenueSA Online .

Documents that are able to be processed via RevenueSA Online should be self-determined according to the approval given to authorised users and should not be forwarded to RevenueSA for the purpose of having the Commissioner make an assessment. These documents are listed in the Stamp Duty Document Guide (Self-Determined) .

If a document is not included in the list of approved documents for processing on RevenueSA Online in the Stamp Duty Document Guide (Self-Determined) , it must be submitted for the assessment of duty by the Commissioner.

If a conveyance is part of a series with other conveyance documents (that is, the conveyances arise from a single contract of sale or together form or arise from one transaction or a series of transactions), all documents must be determined concurrently and Section 67 applied. If documents subject to the provisions of Section 67 are being determined separately they must be submitted for the assessment of the Commissioner together with details of the other transactions in the series.

Refer to the Stamp Duty Document Guide (Section 67) (PDF 336KB) for further information.

View the complete guide (PDF 706KB)

Agreements (PDF 123KB)

• Agreement for the dissolution of a land owning partnership
• Agreement for the transfer of a part interest in a land owning partnership (including retirement of a partner, introduction of a partner)
• Application for amendment of a deposited community plan where the amendment effects a conveyance of land
• Application for the deposit of a strata plan (existing scheme)
• Application for the amendment of a strata plan

Conveyances

Conveyances (PDF 149KB)

• Conveyance arising from or forming one transaction or a series of transactions (Section 67)
• Conveyance of an interest in an exploration tenement pursuant to Section 71D
• Transactions effected without creating a dutiable instrument (Section 71E)C

Conveyance of Land (PDF 391KB)

• Conveyance of land in order to correct an error (Section 107)
• Conveyance of land where the value of land is disputed
• Conveyance of land pursuant to Section 67
• Conveyance of land pursuant to a Deed of Family Arrangement
• Conveyance of land from a trustee to a beneficiary
• Conveyance of property from a trustee to a trustee
• Conveyance of land where the contract is dated on or before 11 July 2002
• Conveyance of land involving adverse possession
• Conveyance of land from a Custodian to an SMSF Trustee
• Conveyance of land pursuant to Section 71CA
• Conveyance of land pursuant to Section 71CB
• Conveyance of vacant land - Qualifying Land
• Conveyance of land - Corporate Reconstruction
• Conveyance of land where the land use code does not support Qualifying Land

Declaration of Trust over Land

Declaration of Trust over Land (PDF 258KB)

Deeds (PDF 259KB)

Land Holder (PDF 87KB)

• Conveyance of an interest in a land holding entity (for transactions after 1 July 2011)
• Conveyance of an interest in a land rich entity (for transactions prior to 30 June 2011)

Transfer of Units

Transfer of Units (PDF 117KB)

• Transfer of units in a land owning unit trust arising from a sale
• Transfer of units in a land owning unit trust for no consideration (includes gifts and an issue or redemption of units on a non pro-rata basis

Guide Glossary

Residential & primary production land, what is residential land.

Land will be taken to be used for residential purposes where the Commissioner, after taking into account information provided by the Valuer-General, determines that:

• it is being predominantly used for residential purposes;
• although the land is not being used for any particular purpose at the relevant time the land should be taken to be used for residential purposes due to improvements that are residential in character having been made to the land; or
• land that is vacant, or vacant with only minor improvements, that the land is within a zone established by a Development Plan under the Planning, Development and Infrastructure Act 2016 that envisages the use, or potential use, of the land as residential, and that the land should be taken to be used for residential purposes due to that zoning (subject to the qualification that if the zoning of the land indicates that the land could, in a manner consistent with the Development Plan, be used for some other purpose (other than for primary production) then the vacant land will not be taken to be used for residential purposes).

The following categories of land coded as Residential are considered by the Commissioner to be commercial in nature (and thus entitled to the relevant qualifying land reduction as from 7 December 2015) and may be self-determined via RevenueSA Online:

• Hotel/Motel Community

The following categories of land are coded as Residential but may be considered by the Commissioner to be commercial in nature (and thus entitled to the relevant qualifying land reduction as from 7 December 2015):

• Serviced apartments;
• Short term unit accommodation; and
• Vacant land for commercial use.

To obtain the qualifying land exemption, a conveyance of land with any of these Land Use Codes (LUCs) must be submitted to the Commissioner for assessment with a submission detailing why the land should be considered as commercial in nature.

What is Primary Production Land?

Land will be taken to be used for primary production purposes where the Commissioner, after taking into account information provided by the Valuer-General, determines that:

• it is being predominantly used for primary production purposes; or
• although the land is not being used for any particular purpose at the relevant time the land should be taken to be used for primary production purposes due to a classification that has been assigned to the land by the Valuer-General.

What Land Use Codes (LUC) are classed as Residential or Primary Production Land?

The Land Use Codes (LUCs) within the following LUC headings are therefore considered to be residential land or primary production land:

• Residential (LUC 1100-1999 with some exceptions);
• Primary production (LUC 9100-9990);
• Vacant Land – Urban (LUC 4100);
• Vacant Land with minor improvements (LUC 4101);
• Vacant Land  – Rural Residential (LUC 4150); and
• Vacant Land with minor improvements – Rural Living (LUC 4151).

See full list of LUCs (PDF 562KB)

The LUC can also be obtained from the Valuation Details Product as part of the Property Interest Report or purchased separately from the Land Services Group.

Qualifying Land

What is qualifying land.

The Commissioner will generally rely on Land Use Codes (LUCs) as determined by the Valuer-General to determine the use of the land. The LUCs within the following LUC headings are considered to be Qualifying Land and may be eligible for the stamp duty reduction:

• Commercial (LUC 2000-2990);
• Industrial (LUC 3100-3909);
• Vacant Land* (with some exceptions) (LUC 4110-4600)
• Institutions (LUC 5100-5990);
• Public Utilities (LUC 6100-6990);
• Recreation (LUC 7100-7900);and
• Mining and Quarrying (LUC 8100-8409).

The following residential Land Use Codes will also be taken to be qualifying land:

• Hotel (LUC 1810);
• Motel (LUC 1820); and
• Hotel/Motel Community (LUC 1831).

*where the land is within a zone established by a Development Plan under the Planning, Development and Infrastructure Act 2016 that envisages the use, or potential use, of the land as non-residential and non-primary production.

For a conveyance of land which you consider to be qualifying land but does not have a LUC from the above categories, the conveying document must be submitted to the Commissioner for assessment advising the LUC, the actual use of the land as at the date of the conveyance and any other details to evidence that the land should be regarded as qualifying land.

Examples of such land include:

What is not qualifying land?

The Land Use Codes (LUCs) within the following LUC headings are not considered to be qualifying land:

• Vacant Land* – Urban (LUC 4100);
• Vacant Land* with minor improvements (LUC 4101);
• Vacant Land*  – Rural Residential (LUC 4150); and
• Vacant Land* with minor improvements – Rural Living (LUC 4151).

*unless the land is within a zone established by a Development Plan under the Planning, Development and Infrastructure Act 2016 that envisages the use, or potential use, of the land as non-residential and non-primary production.

What is the Foreign Ownership Surcharge (FOS)?

Foreign persons who acquire an interest in residential property in South Australia are required to pay a surcharge of 7% on the value of the residential land .

RevenueSA Online will reflect the FOS value based on the data provided in the Commonwealth Reporting Portal Workspace. Where the FOS is applicable, the Workspace will need to reflect the fractional interest to be acquired by the foreign person. For example, if a foreign person is acquiring a 100% interest in the property then the Party Interest Transferred field will be completed as 1/1. If the interest is 50%, then enter ½. RevenueSA Online will then determine and display the FOS value.

For further information, including definitions of foreign persons, refer to RevenueSA’s Foreign Ownership Surcharge page.

For information on visa descriptions and to determine whether a visa is a permanent visa (FOS does not apply) or a temporary visa (FOS does apply) refer to:  https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing

If the conveyance is for multiple titles comprising both land coded as Residential (liable to the FOS) and non-residential the conveying document(s) must be submitted to the Commissioner for assessment with advice as to the apportionment of the consideration for the land coded as Residential and the land coded as Non-Residential.

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Tá an chuid seo den suíomh idirlín ar fáil i mBéarla amháin i láthair na huaire.

Stamp Duty and leases

• Residential houses and apartments

Agreements, assignments and surrenders

• Difference between a lease and a licence
• Paying Stamp Duty on residential leases
• Varying a lease
• Transitional arrangements

Agreement for lease

Instead of executing (signing, sealing or both) a lease, you may execute an agreement for lease. An agreement for lease sets out the terms that would be included in a lease.

You must pay Stamp Duty if the agreement is for:

• a period no longer than 35 years, or for an indefinite period
• any period over 35 years where you have paid 25% or more of the consideration in the agreement
• the lease of a residential house or apartment where the annual rent is €50,000 or greater.

You must pay Stamp Duty on the consideration and period set out in the agreement.

If the agreement was executed (signed, sealed or both) before 17 December 2023, please refer to Section 2.6 of the TDM Schedule 1 - Stamp Duties on Instruments for the previous thresholds.

Assignment of a lease

Leases are between a landlord and a tenant. If a tenant assigns (transfers) the lease to another person, Stamp Duty must be paid on the assignment. You treat an assignment the same way as a purchase of property.

Mary leases the premises in which she conducts her accountancy business from John. She entered into the lease in 2015. The period of the lease is 20 years. She pays €10,000 in rent each year.

Her business is doing well and she needs to move to a bigger premises. Tom agrees to pay Mary market value, that is, €20,000 to take over the lease.

The instrument (usually called a Deed of Assignment) to transfer the lease is executed on 2 February 2019. Tom pays Stamp Duty on this Deed. He pays Stamp Duty on €20,000. The Stamp Duty rate is the rate applicable to transfers of non-residential property.

Once the lease is assigned to Tom, Tom takes over all the obligations in the lease, for example, to pay rent to the landlord.

Surrender of a lease

A surrender of a lease is not the same as an assignment of a lease. Once you surrender your lease to the landlord, it ceases to exist.

For further information, please see Exchanges, partitions, releases and surrenders .

Next: Difference between a lease and a licence

Published: 28 March 2024 Please rate how useful this page was to you Print this page

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What Is a Stamp Duty?

Understanding a stamp duty.

• History of Stamp Duties in the U.S.

The Bottom Line

• Government & Policy

Stamp Duty: Meaning and History in the U.S.

A stamp duty is a tax that governments place on legal documents, usually involving the transfer of real estate or other assets. Governments can impose stamp duties, also known as stamp taxes, on documents that are needed to legally record those types of transactions, as well as on documents recording marriages, military commissions, copyrights, patents, and so forth.

Historically, governments have used stamp taxes as a way to raise money to fund their activities. Stamp duties are thought to have originated in Venice in 1604 before being reinvented by Spain in the 1610s, and eventually spreading to Great Britain and her colonies in the late 1600s. They were called “stamp” duties because a physical stamp was put on the document as proof that it had been officially recorded and the tax liability had been paid.

Key Takeaways

• A stamp duty—also known as a stamp tax or documentary stamp tax—is a tax that a government levies on documents that are required to legally record certain types of transactions.
• Governments have imposed stamp duties on a variety of documents, including those related to the sale or transfer of real estate, patents, securities, and copyrights.
• Governments use these taxes as a source of revenue to fund government programs and activities. In some cases, they are referred to as revenue stamps.

The stamp duty is also known as a documentary stamp tax. Governments around the world levy these taxes on a variety of legally recorded documents.

Before income and consumption taxes provided governments with a substantial tax base, they raised revenue primarily through property taxes , import duties , and stamp duties on financial transactions. 

As income and consumption have grown, it might have made sense to do away with stamp duties. So why do we still have them in many places? Simply put, they provide a steady stream of income for governments.

Today, however, stamp duties apply to far less than the broad category of “financial transactions.” They do remain on properties, though. They are often levied when real estate is transferred or sold; additionally, many states impose taxes on mortgages and other instruments securing loans against real estate.

While the United States once imposed stamp taxes on a variety of transactional documents, there is no federal stamp tax today, except in very limited circumstances. One is a tax on the transfer of certain firearms and accessories that are subject to the National Firearms Act.

The U.S. Fish and Wildlife Service also requires waterfowl hunters age 16 or older to purchase Federal Duck Stamps, which serve as both a hunting license and a free pass for any national wildlife refuge that otherwise charges an entry fee. The agency says that “nearly all of the proceeds are used to conserve habitat for birds and other wildlife, birders, nature photographers, and other outdoor enthusiasts.” Some states also issue their own versions of duck stamps for similar conservation purposes.

Otherwise, only state and local governments currently impose stamp taxes in the United States. In addition to various legal documents, “48 states and the District of Columbia, Guam, and Puerto Rico currently require a tax stamp affixed to tobacco products,” according to the Centers for Disease Control and Prevention.

History of Stamp Duties in the United States

By the 17th century, governments had introduced stamp duties throughout Europe. Over the next century, they became a common form of taxation in the Netherlands, France, Denmark, Prussia, and England. 

In 1765, the British parliament passed a stamp tax to be imposed on American colonists, requiring them to pay tax on all printed papers, such as licenses, newspapers, ships’ papers, and even playing cards. The British government said the funds collected from stamp duties were needed to pay for positioning troops in certain locations of America and to pay for the massive war debt it had incurred during the Seven Years’ War.

American colonists were outraged by the imposition of the taxes, which they believed were a deliberate attempt by Britain to control commerce and curtail colonial independence. The Stamp Tax was enacted without the knowledge of or input from the colonies, becoming a prime example of taxation without representation . The Stamp Act led to the first concentrated effort by the colonists to resist British authority and became a milestone event leading up to the American Revolution.

Stamp taxes have endured much longer in Britain itself. Today, the United Kingdom imposes a stamp duty land tax (SDLT) on home purchases, although homes under a certain value are not subject to it. For example, the current threshold for residential properties is £250,000. However, first-time homebuyers get a break—their threshold is £425,000 when buying a property worth £625,000.

What Is a Transfer Tax?

A transfer tax is a type of stamp tax that some state and local governments impose when the deed or title to a home or other property changes hands. It is often included in the long list of closing costs .

Are Stamp Taxes Tax Deductible?

Not directly, although the law does offer a tax break on some of them. As the Internal Revenue Service (IRS) explains, in the case of home purchases, “You can’t deduct transfer taxes and similar taxes and charges on the sale of a personal home. If you are the buyer and you pay them, include them in the cost basis of the property. If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale.”

Are Tax Stamps Collectible?

Yes, some postage stamp collectors also collect tax stamps, often referred to in the hobby as “revenue stamps.”

A stamp duty, also known as a stamp tax, is a tax imposed on certain transactions and documents, in the United States typically by state or local governments. In many cases, a stamp duty will represent a charge for recording the transfer of real estate or other assets from seller to buyer, but it can also be levied on other types of documents and even some products, such as cigarettes. Stamp taxes were a major factor leading to the American Revolution.

TechRound. " Who Introduced Stamp Duty Land Tax (SDLT)? "

PwC, Worldwide Tax Summaries. “ United States: Corporate—Other Taxes .”

U.S. Fish and Wildlife Service. “ Duck Stamps .”

U.S. Centers for Disease Control and Prevention. “ STATE System Tax Stamp Fact Sheet .”

Gilder Lehrman Institute of American History. “ The Stamp Act, 1765 .”

National Constitution Center. " On This Day: “No Taxation Without Representation!” ."

Gov.UK. “ Stamp Duty Land Tax .”

Internal Revenue Service. “ Publication 530 (2023), Tax Information for Homeowners ."

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06 February 2017

Stamp Duty issues in slump sale transactions

by Rohit Subramanian

Slump sale is a commonly used method of business acquisition wherein an undertaking as a “going concern” is transferred from one entity to another. The term ‘ slump sale ’ incorporated under the Income Tax Act, 1961 [See End Note 1] (“IT Act”) has been defined to constitute the following elements: (a) sale of an undertaking/business activity [See End Note 2] taken as a whole – lock, stock and barrel ; (b) sale shall be for a lump sum consideration; and (c) no separate values shall be assigned to individual assets and liabilities.

However, specific values can be assigned to individual assets or liabilities for the sole purpose of payment of stamp duty, registration fees or other similar taxes or fees. This is because the assets constituting the business in a slump sale transaction may include movable property (tangible and intangible, including intellectual property), immovable property (land, buildings, plant & machinery that are permanently fixed or embedded to the earth), unsecured loans, advances/deposits, human resources and contracts, and stamp duty chargeability and registration requirement for each type of asset/liabilities shall vary. In order to give effect to the transaction, the parties typically enter into a Business Transfer Agreement (“BTA” or “Agreement”), which inter alia records the following terms and conditions: 

• The assets of the business undertaking to be transferred to the Purchaser are listed in the schedule to the Agreement;
• The lump sum consideration for sale is specified ( sale price is generally based on a business valuation report );
• The BTA shall specify the date (“Closing Date”), prior to which all necessary approvals, permissions, documents to consummate the transaction are obtained;
• Typically, the seller shall make requisite representations and warranties with respect to the legal status and financial health of the business undertaking as on the Closing Date;  
• Upon obtaining all requisite documents and approvals, the transfer of business takes place on the Closing Date.

Stamp Duty chargeable on BTA

Stamp duty is a duty payable upon the execution of certain instruments or documents specified in the Indian Stamp Act, 1899 (“IS Act”) or the relevant state Stamp Act as the case maybe. In absence of any State stamp legislation, the IS Act applies. The general principle with regard to stamp duty is that duty has to be determined with reference to an instrument, not in reference to a transaction.[See End Note 3] Therefore, to understand the stamp duty liability for a specific transaction, it is important to understand the instruments involved in the transaction and the subject-matter of the instrument.[See End Note 4]

It is common practice for a BTA to be structured as an “ agreement to sale ”. In such cases, the Agreement provides a general framework pursuant to which the business undertaking is transferred on the Closing Date. BTA in itself may not contemplate any transfer and can mandate the execution of a deed of “ conveyance ”[See End Note 5] on or before the Closing Date to effectuate the transfer. However, there are instances where the Agreement contains recitals with respect to the payment of consideration, handing over of the possession of property along with title deeds of such property. In such cases, the BTA assumes the color of a “conveyance” and stamp duty is levied accordingly.

Since the transfer envisaged under the Agreement is the sale of a business undertaking as a whole, it cannot be specifically equated with the sale of movable or immovable property. The IS Act as well as State Stamp Acts do not contain specific provisions levying duty on an agreement relating to the transfer of “business” as such. Therefore, it is imperative that each asset proposed to be transferred to the purchaser vide a BTA is individually identified for the purpose of stamp duty as movable or immovable. The levy of stamp duty depends on the State in which the Agreement is executed. For better clarity, let us examine the stamp duty implications on a BTA under Central and certain State legislations.

Positon under the Indian Stamp Act, 1899

On perusal of the definition of “conveyance” under the IS Act, it is understood that no distinction is made between moveable and immovable property.[See End Note 6] Tangible moveable property can be sold by delivery to the purchaser on receipt of the price without an actual conveyance, but if a conveyance in writing comes into existence, it is chargeable to duty as such. Intangible movable property such as actionable debt or goodwill has to necessarily be transferred under a written instrument and chargeable as conveyance. Whereas land/buildings are immovable property, machinery installed in a factory premises (fixed to the ground) can be considered as an immovable property, depending on the degree and permanency of the attachment, and the purpose of installing and attaching the machinery. For instance, the sale of a fertilizer plant as part of a slump sale along with land and building, would be considered as immovable property if it was always intended that the plant remains permanently affixed to the land and building being transferred.[See End Note 7]

Article 5 to the Schedule of the IS Act prescribes the stamp duty chargeable on an “ Agreement or Memorandum of an Agreement ”. Article 5 further sub-classifies several categories on the basis of the subject-matter of an agreement prescribing specific duty applicable to a particular instrument. A residuary provision is provided under Article 5(c) wherein all such agreements not specifically provided for are classified and duty payable is separately prescribed.

If a contract does not intend to operate as an immediate transfer of the sale of property, such instrument is required to be stamped as an agreement rather than a conveyance. An agreement to sell a business undertaking with its assets including goodwill, would not amount to conveyance but would be merely a contract to sell, although the parties intended that when the transaction was completed, it should take effect from the date of the agreement and although in order to effect the contemplated sale, no actual deed of conveyance was prepared subsequently with regard to goodwill and movables (a sale deed being executed only in respect of immovable property).[See End Note 8]

Therefore, under the IS Act, a BTA not evidencing a transfer of property shall be duly stamped as an agreement under Article 5(c), thereby requiring deed of conveyance to be executed on or before the Closing Date. Whereas the execution of a conveyance deed for the purpose of immovable property is absolutely necessary to establish title and ownership, transfer of ownership of movable property can be made by delivery of such property. In the event the BTA records the transfer of both movable and immovable property without the requirement of executing a conveyance deed, the BTA shall be construed as a conveyance and stamp duty as prescribed under Article 23 would be leviable on the said instrument.   

Position under the Bombay Stamp Act, 1957 (“BS Act”)

The BS Act follows a scheme similar to the IS Act, wherein Article 5 of its Schedule prescribes stamp duty to be levied on an instrument which is an “ Agreement or its records or Memorandum an Agreement ”. It is to be noted that Article 5(h)(A)(iv) specifically identifies an agreement that: (a) creates any obligation, right or interest; (b) has monetary value; and (c) is not covered under any other provision of the BS Act.

The stamp duty chargeable may extend up to two rupees for every thousand rupees of the monetary value stated in the Agreement. An agreement in the nature of a BTA squarely falls under Article 5(h)(A) of the BS Act. Despite the generic nature of the description in Article 5(h)(A), the BS Act has retained a residuary provision under Article 5(h)(B) which prescribes stamp duty of only INR Hundred (100) with respect to agreements not otherwise provided for. Given that Article 5(h)(A) describes the instrument more specifically, a BTA executed in the State of Maharashtra should be duly stamped under Article 5(h)(A) rather than Article 5(h)(B).

Article 25 of the BS Act prescribes the stamp duty payable on an instrument of conveyance with respect to movable and/or immovable property, as the case may be. However, the BS Act specifically states that if an agreement to sell an immovable property effectuates the transfer of possession of such property before or after execution, the same shall be deemed to be a conveyance and stamp duty shall be levied accordingly. The BS Act also provides an exemption in case the ‘ agreement to sale ’ is deemed as a conveyance. That is, in case the BTA itself effectuates the transfer of movable and immovable property constituting the business, resulting in such instrument being duly stamped as conveyance under Article 25 of the BS Act, the stamp duty paid on such agreement shall be adjusted towards the total stamp duty leviable on the conveyance deed.

Position under the Karnataka Stamp Act, 1957 (“KS Act”)

The KS Act deviates from the BS Act as well as the IS Act, in light of specific provisions dealing with the transfer of movable and immovable property under Article 5 of KS Act. Article 5(e) of the KS Act prescribes the stamp duty chargeable on an agreement relating to sale of immovable property with part-performance of the contract being made. In the event possession of the property is delivered or agreed to be delivered prior to execution of conveyance, the stamp duty prescribed is the same as the duty prescribed with respect to a conveyance deed as specified in Article 20. Similar to the BS Act, the KS Act also provides for set-off of the stamp duty against the duty paid on the conveyance deed. In the event possession of the property is not delivered, the stamp duty liability on such agreements shall be restricted to INR twenty thousand.

Similarly, Article 5(g) of the KS Act prescribes the stamp duty payable with respect to an agreement relating to the sale of movable property. In the event possession of movable property is delivered or agreed to be delivered without executing a conveyance deed, the stamp duty prescribed on such agreement is three percent (3%) of the consideration or the market value of the property, whichever is higher. In the event the possession of the property is not delivered, the stamp duty liability is restricted to INR twenty thousand. Apart from these provisions, a residuary clause under Article 5(j) of the KS Act provides that any agreement not specifically provided for in Article 5 shall be duly stamped for INR two hundred. Therefore, the stamp duty payable on a BTA executed in the State of Karnataka shall depend upon the structure of the BTA, whether conveyance deed is proposed to be executed by the parties with respect to the movable properties forming part of the business undertaking and whether a business undertaking purported to be transferred under a BTA can be equated to a movable property or an immovable property.

Word of caution

BTA typically comprises of numerous items of transfer, which may include all kinds of tangible, intangible, contracts, movable property and immovable property. While a slump sale transaction is the preferred mode of business acquisition from an income-tax perspective, given the complexities involved in the determination of stamp duty on the instrument of transfer, it is recommended that the parties should approach the relevant stamp authority for adjudication of stamp duty [See End Note 9] and seek the opinion of the District Officer with respect to the determination of the duty chargeable on the instrument, if there is any ambiguity in the concerned Stamp Act. It is always necessary and beneficial for the parties to treat stamp duty aspects very carefully to avoid any penalties, which can be as high as ten times the actual stamp duty payable. 

[ The authors are Associate and Joint Partner, respectively in Corporate Practice, Lakshmikumaran & Sridharan, Bengaluru ]

• Section 2(42C) of the Income Tax Act, 1961
• Explanation 1 to Section19AA defines “ undertaking ” to include any part of an undertaking, or a unit or division of an undertaking or a business activity taken as a whole , but does not include individual assets or liabilities or any combination thereof not constituting a business activity.
• Swadeshi Cotton mills Co, in Re AIR 1932 All 29.
• Section 2(14) of the IS Act defines “ Instrument ” to include every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded.
• In terms of the IS Act, the term “conveyance” has been defined in an exhaustive manner to include any instrument or conveyance on sale, by virtue of which any property (moveable or immovable) is transferred inter vivos and which is not specifically provided in the schedule to the IS Act.
• "Immovable property" includes land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth and “movable property” includes any property except immovable property.
• Duncans Industries Ltd v. State of UP, AIR 2000 SC 355.
• In Re, Swadeshi Cotton Mills Co 1932, ALJ 394: AIR 1932 ALL 291 (SB) and others.
• Section 31 of the IS Act, BS Act and the KS Act.

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Stamp Duty on Deed of assignment

CS Snehal (Compliance Manager) (346 Points)

BOMBAY STAMPS ACT, 1958 (As applicable to the State of Gujarat)

ORDER DATED 25 TH FEBRUARY, 1998

No. GHM - 98-221H.STP/1096/2527/H.1. In exercise of the powers conferred by Clause (a) of Section 9 of the Bombay Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby reduces the duty with which an instrument of securitisation of Loans or the Assignment of Debt with underlying securities is chargeable under Article 20(a) of Schedule 1 to the said Act, to ten paise for every rupees 100 or part thereof of the loan securitised or debt assigned with underlying securities.

 2 Replies

CourseCart.in (Mentor at SHAYVIDZ Academy)   (3756 Points) --> Replied 02 October 2010

thanks for this query Snehal.. I also wanna know the same..

Online classes for CA CS CMA. Professional courses for GST, Tally, Others & Books

devcharan (sr.ex) (22 Points) --> Replied 28 October 2011

pls let me know the stampduty on deed of assignment in andhra pradesh? And also let me know relevant clause which deals with stampduty on deed of assignment?

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Allahabad High Court On Stamp Duty On Debt Assignment

Contributor.

Introduction

Assignment of debt is one of the most common forms of transactions in financial markets. It essentially entails transfer of a debt from a creditor (assignor) to a third-party (assignee).

One of the biggest challenges faced in debt assignment transactions in India is the significant stamp duty implication on the deed of assignment. Considering the volume of assignment transactions undertaken generally by banks and financial institutions or by asset reconstruction companies (" ARCs "), the stamp duty levied becomes a significant cost in such transactions.

The Constitution of India (" Constitution ") confers upon the Parliament and each State Legislature the power to levy taxes and other duties. The subjects on which the Parliament or a State Legislature or both can legislate are specified in the Seventh Schedule of the Constitution. The Seventh Schedule is divided into 3 (three) lists:

• Union List;
• State List; and
• Concurrent List.

The Parliament has the exclusive power to legislate on the subjects enumerated in the Union List. The State List enumerates the subjects on which each State Legislature can legislate and such laws operate within the territory of each State. The Parliament, as well as the State Legislatures, have the power to legislate over the subjects listed in the Concurrent List.

The entry pertaining to levy of stamp duty in the Union List is as follows: -

" 91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts."

The entry pertaining to levy of stamp duty in the State List is as follows: -

" 63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty. "

The entry pertaining to levy of stamp duty in the Concurrent List is as follows: -

" 44. Stamp duties other than duties or fees collected by means of judicial stamps, but not including rates of stamp duty . " [emphasis supplied]

From the aforementioned entries, it is clear that the power to legislate on the rate of stamp duty chargeable on instruments of debt assignment (since it is not covered under Entry 91 of the Union List) is with the State Legislature. However, the power to determine whether stamp duty can be charged or not on a specific instrument is in the Concurrent List.

In this regard, it may be noted that pursuant to the Enforcement of Security Interest and Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Act, 2016 (" Amendment Act "), the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (" SARFAESI ") and the Indian Stamp Act were amended to provide for an exemption from stamp duty on a deed of assignment in favour of an ARC.

As mentioned above, the power to legislate on whether stamp duty is payable or not on an instrument is in the Concurrent List. Therefore, the Parliament has the power to legislate on the aforesaid subject.

Pursuant to the Amendment Act, section 5(1A) was inserted in SARFAESI which provides that any agreement or document for transfer or assignment of rights or interest in financial assets under section 5(1) of SARFAESI in favour of an ARC is not liable to payment of stamp duty.

In several States, notifications have been issued for remission and/ or reduction of stamp duties on debt assignment transactions. For instance, in Rajasthan, the stamp duty chargeable on any agreement or other document executed for transfer or assignment of rights or interests in financial assets of banks or financial institutions under section 5 of SARFAESI in favour of ARCs 1 has been remitted. Further, in Maharashtra, the stamp duty on instrument of securitization of loans or assignment of debt with underlying security has been reduced to 0.1% (zero point one percent) of the loan securitized or the debt assigned subject to a maximum of Rs. 1,00,000 (Rupees one lac) 2 .

Certain State Governments, such as those of Rajasthan and Tamil Nadu have reduced the stamp duty based on the nature of the financial asset being assigned. In Rajasthan, the stamp duty has been reduced for assignment of standard assets whilst in Tamil Nadu, the stamp duty has been reduced for assignment of non-performing assets and assignment in favour of ARCs.

This paper discusses a decision passed by the Allahabad High Court in the case of Kotak Mahindra Bank Limited v. State of UP & Ors. 3 (" Kotak case "), where it was held that an instrument of assignment is chargeable with stamp duty under Article 62(c) (Transfer) of Schedule 1B of the Indian Stamp Act, as applicable in Uttar Pradesh (" UP Stamp Act "), as opposed to Article 23 (Conveyance) of Schedule 1B of the UP Stamp Act.

The stamp duty payable in various States under Article 23 or the relevant provision for conveyance is on an ad valorem basis whereas the stamp payable under Article 62(c) or relevant provision for transfer of interest secured, inter alia , by bond or mortgage deed, is a nominal amount. For instance, in Uttar Pradesh, the stamp duty payable under Article 62(c) is Rs. 100 (Rupees one hundred).

Decision in the Kotak case

In the Kotak case, Kotak Mahindra Bank Limited (" Kotak ") had purchased and acquired certain loans from State Bank of India (" Assignor ") along with the underlying securities.

The question for consideration before the full bench of the Allahabad High Court was whether the deed executed by the applicant with the underlying securities would be chargeable with duty under Article 62(c) or Article 23 of Schedule 1B of the UP Stamp Act.

The court observed that in order to determine whether an instrument is sufficiently stamped, one must look at the instrument in its entirety to find out the true character and the dominant purpose of the instrument. In this case it was observed that the dominant purpose of the deed of assignment entered into between Kotak and the Assignor (" Instrument "), was to transfer/ assign the debts along with the underlying securities, thereby, entitling Kotak to demand, receive and recover the debts in its own name and right.

Article 11 of Schedule 1B of the UP Stamp Act provides that an instrument of assignment can be charged to stamp duty either as a conveyance, a transfer or a transfer of lease. The court observed that since the Instrument was not a transfer of lease, it would either be a conveyance or a transfer.

The court referred to the definition of conveyance in the UP Stamp Act, which reads as follows:

" Conveyance" . — "Conveyance" includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred inter vivos and which is not otherwise specifically provided for [by Schedule I, Schedule IA or Schedule IB] [as the case may be];" [emphasis supplied]

The court held that the term conveyance denotes an instrument in writing by which some title or interest is transferred from one person to other and that the use of the words "on sale" and "is transferred" denote that the document itself should create or vest a complete title in the subject matter of the transfer, in the vendee. In this case since under the Instrument, the rights of the Assignor to recover the debts secured by the underlying securities had been transferred to Kotak, it was held that the requirement of conveyance or sale cannot be said to be satisfied.

The court further observed that debt is purely an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property. Where a transaction does not affect the transfer of any immovable or movable property, Article 23 of Schedule 1B cannot have any applicability.

The court's view was that since debt along with underlying securities is an interest secured by bonds and/ or mortgages, transfer of such debt would be chargeable under Article 62(c).

The court further clarified that under the Instrument, merely the right under the contract to recover the debts had been transferred. Since the borrower(s) had never transferred the title in the immovable property given in security to the Assignor, the Assignor could merely transfer its rights i.e. mortgagee's rights in the property to recover the debts. It was further observed that the Assignor never had any title to the underlying securities and that it merely had the right to enforce the security interest upon default of the borrower(s) in repayment. The right transferred to Kotak was primarily the right to recover the debts, in accordance with law, by proceeding against the underlying security furnished by the bonds/ mortgage deed(s).

Therefore, the court held that the Instrument was chargeable with stamp duty under Article 62(c) of Schedule 1B of the UP Stamp Act.

Whilst coming to the conclusion that assignment of debt would not constitute a conveyance, the court referred to the definition of conveyance to state that debt is an intangible property which has to be claimed or enforced by action and not by taking physical possession thereof, in contrast to immovable and movable property.

In this regard, it may be noted that there are various judicial precedents 4 , where it has been held that an interest (including mortgage interest) in immovable property is itself immovable property.

However, even assuming assignment of debt with underlying securities over immovable property amounts to a conveyance, it may be pertinent to refer to the definition of conveyance in the UP Stamp Act which specifically excludes a conveyance which is otherwise provided for by the Schedule to the UP Stamp Act.

Article 62(c) of the UP Stamp Act reads as follows:

" 62. Transfer (whether with or without consideration) –

(c) of any interest secured by a bond, mortgage- deed or policy of insurance-- "

In view of the above, transfer of any interest secured by a mortgage deed, which is covered under Article 62(c), would be excluded from the meaning of conveyance and would be chargeable to stamp duty under Article 62.

In this regard it may be pertinent to refer to the definitions of 'bond' and 'mortgage deed' under the UP Stamp Act, which is as follows:

" " Bond " includes-

• any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be;
• any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another; and
• any instrument so attested, whereby a person obliges himself to deliver grain or other agricultural produce to another "

" " Mortgage-deed ". — "mortgage-deed" includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of another, a right over or in respect of specified property; "

In view of the above, where a debt secured by a bond or a mortgage deed is assigned under a deed of assignment, the stamp duty payable on such deed of assignment will be under Article 62(c) of the UP Stamp Act or corresponding provisions of the Stamp Act of other States.

However, in cases of unsecured loans or loans secured by an equitable mortgage (where there is no mortgage deed), the deed of assignment would attract ad valorem stamp duty chargeable on conveyance, since the same will not get covered under Article 62(c) or similar provisions in other states.

The market practice until now has been to stamp the deed of assignment of debt under the relevant article for Conveyance in the applicable Stamp Act. In fact, in States such as Maharashtra, the State Government has issued notifications for reduction of stamp duty on a deed of assignment under the article for Conveyance.

The judgment passed by the Allahabad High Court in the Kotak case may prove to be a welcome step in reducing the incidence of stamp duty on debt assignment transactions. However, it would need to be seen whether in other States a similar view is taken by stamp duty authorities.

1. Notification No. F4(3)FD/Tax/2017-110 dated March 8, 2017 issued by Finance Department (Tax Division) Government Of Rajasthan.

2. Notification No.Mudrank-2002/875/C.R.173-M-1 dated May 6, 2002 issued by Revenue & Forests Department, Government of Maharashtra.

3. Reference Against MISC. Acts. No. 1 of 2016, order dated February 9, 2018.

4. Bank of Upper India Ltd. (in liquidation) v. Fanny Skinner and Ors. , AIR 1929 All 161. See also Prahlad Dalsukhrai and Ors. v. Maganlal Muljibhai Tewar , AIR 1952 Bom 454 and Harihar Pandey v. Vindhayachal Rai and Ors. , AIR 1949 Pat 170.

Originally published February 13, 2018.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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What is the Stamp Duty For Trademark Assignment?

• Post author: D. Lalitha B.com B.L (Hons)
• Post published: June 6, 2024
• Post category: Intellectual Property / Trademark

Last Updated on June 6, 2024 by D. Lalitha B.com B.L (Hons)

Trademarks are important to businesses because they foster customer loyalty and memorability. They envelop names, logos, or particular images that separate an organization’s contributions from those of others in a particular industry.  Trademark assignment  is the most common way of moving brand name ownership starting with one entity then onto the next.

Kinds of Trademark Assignment:

There are four methods available for assigning a trademark. They’re:

• Partial Assignment:
• The new owner receives only a part of the rights, title, and interest in the trademark.
• The current owner retains some rights, like the authority to use it in particular markets or with specific goods/services.
• Complete Assignment:
• All rights, titles, and interests in the trademark are transferred from the current owner to the new one.
• The new owner becomes the sole owner, assuming all associated rights and duties of the trademark.
• The assignment with goodwill:
• Both the business associated with the trademark and its ownership rights are transferred.
• This occurs when a business is sold, and the new owner wishes to obtain the related trademark in addition to the business.
• The assignment without goodwill:
• Only the ownership rights of the trademark are transferred.
• Business or goodwill associated with the trademark is not included in the transfer.
• Employed when the trademark owner wishes to sell the trademark separately from the business.

Why is trademark Assignment Important?

• Financial gain for the assignor:
• Selling the brand name can generate revenue for the business owner.
• The funds can be applied to retirement or other companies.
• Asset acquisition for the assignee:
• Acquiring the trademark provides a valuable asset for establishing and growing the business.
• Increasing efficiency in business processes:
• Facilitates brand consolidations, strengthening identities and marketing effectiveness.
• Resolves legal issues related to trademark ownership, saving time and money.
• Safeguarding brand value:
• Ensures the trademark is used according to the original brand vision.
• Gives reassurance about the brand reputation and usage.

Requirements of the Trademark Assignment Deed:

• The assignment deed must only be submitted in writing.
• The trademark that is being issued should be identified.
• The parties must both complete the assignment deed.
• The purpose of the assignment deed should be money motive.
• Whether the assignment is with or without goodwill should be included in the assignment deed.
• In accordance with the Indian Stamp Act, the assignment deed must be stamped.

Applying Trademark Application:

Here’s the process of applying for a trademark online in India

• Create a profile with the Trademark Registrar:
• Register on the Trademark Registrar’s website.
• Provide necessary information:
• Identify goods and services.
• Provide company name and type of mark filing.
• Submit the required documents:
• Drawing of the proposed mark.
• Affidavit of use or intent to use the mark in commerce.
• Proof of ownership of the mark.
• Pay filing fee:
• Submit the required fee for trademark application processing.
• Send in an authentic, verified signature:
• Authenticate the application with an authenticated copy of the signature.
• Application review:
• The application is sent to an examiner for review.
• Examiner’s decision:
• The examiner makes a decision about, to allow the mark to be put into use.
• Approval and registration:
• If approved, receive a registration certificate with the symbol ® and identifying information.

Fees and Payments:

Here’s the breakdown of the fees necessary for applying for a registered trademark online in India:

• ₹9,000 for electronic filing.
• ₹10,000 for filing in person with the Trademark Registrar.
• ₹4,500 for e-filing.
• ₹5,000 for filing by hand.
• 5% of the application or assignment value, as per the Stamp Duty Act, is payable per trademark application or assignment submitted.

Forms of Identification:

Here are the options for submitting forms of identification when applying for a registered trademark:

• Submit a filing affidavit signed by the owner or owner’s representative.
• The affidavit must be scrutinised by a competent individual.
• Include brand logo, description, and date of first use.
• List names and addresses of all owners or rights holders.
• Submit an application containing documents establishing brand ownership.
• Include a copy of the registration of the trademark certificate or a statement from the entity claiming ownership.
• Provide a statement confirming the applicant’s consent to use the mark.
• Provide contact information for authorised delegates.
• Submit an application containing extracts from earlier submission documents.
• Include a statement confirming the copying of copyrighted material without permission.

What does the “Stamp Duty” entail?

Here’s an overview of stamp duty and its significance:

• Stamp duty is imposed by state governments.
• It applies to different sorts of business endeavours, like real estate transactions,  insurance policy  administration, and financial transactions.
• Mandated by the Indian Stamp Act of 1899 Section 3.
• Ensures legal completion and validity of documents.
• State governments collect revenue from stamp duty.
• Rates are determined based on document type and transaction amount.

What is Stamp Duty for trademark Assignment?

Here’s a summary of stamp duty for trademark assignment, including relevant rates:

• Stamp duty is payable on a deed of IP rights assignment, except for copyright assignments, which are exempt.
• Imposed by state law, governed by the Indian Stamp Act of 1899.
• For trademark transfer deeds and related paperwork to be legally enforceable in India, they must be stamped.
• The amount of stamp duty for trademark assignment is based on the assigned trademark’s market value.
• State governments determine market value, which varies from state to state.
• Utilized to initiate registration requests for an individual’s title following an assignment.
• Mumbai (Maharashtra): 3%
• Kolkata (West Bengal): 5%
• Ahmedabad (Gujarat): 5%

The Key role of Stamp Duty in the context of trademark assignment:

Here’s the key role of Stamp Duty in trademark assignment:

• Legal documents, including trademark transfer deeds, must be duly stamped in accordance with the Indian Stamp Act of 1899.
• Non-payment of stamp duty can render the deed invalid, unenforceable, and, or not valid in the court.
• Stamp duty acts as a source of revenue for the government.
• The generated revenue is contributing to funding various public benefits initiatives, like social welfare, education, and infrastructure development.

Conclusion:

All in all, consideration should be given to stamp duty while assigning a trademark. To ensure a consistent and hassle-free assignment of trademarks, it is advisable that you get the advice of a lawyer who can direct you through the stamp duty payment method and assist you with consenting to whatever legal criteria are still there. To ensure the viability of a trademark assignment in India, it is important to fathom the stamp duty guidelines and fulfil the associated requirements.

• Could you explain the concept of a trademark assignment?

A trademark assignment, otherwise called a trademark transfer, alludes to the most common way of transferring the ownership of a brand, starting with one party and then onto the next. It includes the total transfer, with all rights, title, and interest in the brand.

• Can a trademark assignment be partial?

Yes, it can be partial. It is possible to transfer only a part of the rights, title, and interest in a brand name as long as both parties agree and the terms are clearly stated in the assignment agreement.

• Why Notarising a Trademark Assignment is Important?

The assignee benefits from the assignment being notarised. In order to prove that there’s not a possibility of deliberate document fraud pertaining to the assignment, notarising is also vital. The assignment consequently, it must be notarised with the appropriate stamp duty. Moreover, the assignor needs to give a notarised affidavit verifying the way that the brand name is really theirs.

• Is trademark assignment possible before registration?

Yes, you can do it by submitting the TM – M form with the prescribed fees.

• What if the registry raises a query on an assignment?

If the registry issues a notice on your request for an assignment, you can reply to it by submitting a letter in the prescribed format.

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D. Lalitha B.com B.L (Hons)

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Kedar Naniwadekar   --> 29 October 2015

Calculation of stamp duty for trademark assignment deed

What is the stamp duty for Trademark Assignment Deed and how is the stamp duty calculated for the same? Also what is the procedure for registration of Trademark Assignment Deed? I have been given 2 different advices 1) the stamp duty shall be 0.1% of the total value if the value is below Rs. 10 Lakhs and 0.2% if the total value is above Rs. 10 Lakhs; and 2) the stamp duty shall be 3% of the total value.

 1 Replies

Priyanka Kulkarni (Advocate and Intellectual Property Attorney Solicitor (England and Wales) (NP))     --> 30 October 2015

Being lawyer, first you need to check the relevant jurisdiction and decide which stamp Act applies e.g. Maharashtra Stamp Act (previously Bombay Stamp Act) and then read the relevant provision.

You may contact me at [email protected]

Priyanka Kulkarni

IP Attorney and Solicitor of England and Wales( NP)

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