Opinion Of Eminent Legal Luminaries On Controversial Issues

Whether Stamp Duty Is Payable On Agreement To Sale?

QUERY: Whether Agreement for sale or Agreement to sale Stamp Duty is payable?
ANSWER: Section 2(g) of the Bombay Stamp Act, 1958 defines conveyance, which includes:

(i) a conveyance on sale,

(ii) every instruments,

(iii) every decree or final order of any Civil Court

(iv) every order made by the High Court under section 394 of the Companies Act, 1956 [in respect of amalgamation or reconstruction of companies; and every order made by the Reserve Bank of India under section 44A of the Banking Regulation Act, 1949 in respect of amalgamation or reconstruction of Banking Companies]

by which property whether movable or immovable, or any estate or interest in any property is transferred to, or vested in, any other person, inter vivos and which is not otherwise specifically provided for by Schedule I;

In State of Maharashtra v. Mahavir Lalchand Rathod [1992 (2) Bom. C.R. 1] ., it was held that the agreement in question though describing as an agreement to sell in effect for all purposes it is a conveyance as the right, title and interest in the flat stands transferred in favour of the purchaser on payment of installments as provided therein. Even an agreement of sale is dutiable under the Act under Schedule I, Article 25, Explanation.
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