The stamp office determines the market value of the property by referring to an annual price statement (usually known as stamp Duty Ready Reckoner) which shows the market values of various properties in Mumbai. The reckoner divides the property into different categories such as built-up land, undeveloped land, housing units, industrial/office units, shops, etc., and determines their market value accordingly. It is inferred from the clause that, where more than one instrument is executed in connection with a transaction or agreement in which a security is also issued, sold or transferred, the principal instrument is that security for the purposes of collecting tax and no other instrument mentioned in such a transaction or agreement is subject to stamp duty. Since section 4 precedes the entire section, I will start with section 4. In this specific section, reference is made to the «main document» and the payment of stamp duty on such a document. It is very common that in order to conclude the individual transaction we need to execute a number of documents, for example, to buy the apartment from NOIDA, execute a sales agreement, a certificate of sale and a transfer memorandum, so the question arises of on which documents one should pay stamp duty or all documents are subject to stamp duty. According to the scheme of the Indian Constitution, entry 91 of List I of the Seventh Annex confers the legislative power to fix stamp duty on the issue of shares or the «transfer of shares» between the governments of the Länder or the Government of the Union20. that is, «issuance of shares». Since such an exercise of legislative power goes beyond the constitutional principles of federalism, it may render the action of the Union government constitutionally questionable. As a result of all these technological and legal changes in the securities market, the government was required to amend the Stamp Act and put in place the legal and institutional mechanism for states to collect stamp duty in one place on an organization`s securities market instruments (via exchange-licensed clearing companies or depositaries) on an instrument. Share purchase agreement is a transfer document that makes the sale and purchase of shares between the buyer and seller. «People living in countries with high rates of stamp duty will benefit from the uniform application of stamp duty. On the other hand, proprietary or high-frequency traders who are opportunistically in low-stamp duty states will pay more,» said Nithin Kamath, CEO of Zerodha.
4.5 The stamps must be in the name of one of the parties to the transaction. They may not be in the name of the public accountant or counsel of the parties. In addition, the Amending Act also covers other types of «derivatives» within the meaning of Section 45U(a) of the Reserve Bank of India, 1934 («RBI Act»). Derivatives within the meaning of the RBI Act mean «instrument to be settled at a later date, the value of which results from the change in the interest rate, the exchange rate, the credit rating or credit index, the price of the securities (also called «underlying») or a combination of more than one of them, and interest rate swaps, forward rate agreements, foreign exchange swaps, cross-currency swaps, foreign currency options, foreign currency options, rupees or other instruments; which are determined from time to time by the Bank. Section 35 of List 1 of the Bombay Stamp Act provides that stamp duty on the indemnification obligation is the rule. . . .