President gives assent to amend Indian Stamp Act, 1899Date: 22 February 2019 Tags: Bills & Laws
President Ram Nath Kovind gave assent (under Article 111 of constitution) to amend Indian Stamp Act, 1899 to rationalise and harmonise stamp duty and help to curb tax evasion. The amendments to this Act were introduced as part of Finance Act 2019 and was approved by Parliament.
- It proposes to create legal and institutional mechanism to enable States to collect stamp duty on securities market instruments at one place by one agency (through Stock Exchanges or Clearing Corporations authorised by stock exchange or by Depositories).
- It proposes mechanism for appropriately sharing stamp duty with relevant State governments based on state of domicile of buying client d.
- It proposes to create Coordination Council under Article 263 of Constitution by separate order/notification of the President.
- This council will comprise of representatives from Union/States and may be tasked with responsibility of making recommendations regarding review/revision of stamp duty rates.
- The duties levied by Maharashtra will benchmark rate for stamp collection duties as Maharashtra accounts for 70% of the total collection.
- The rates will be chosen in such manner to provide revenue neutral position to state governments and reduce overall tax burden for investors.
- The stamp duty will be paid by either buyer or seller of financial security, as against current practice of levying duty on both.
Significance of amendments
- It will rationalised and harmonised system is expected to lead to zero tax evasion.
- It will minimise cost of collection and enhance revenue productivity.
- Besides adoption of centralised collection mechanism will bring more revenue and greater stability to the revenue collection by the states.
- It will help develop equity markets and equity culture across length and breadth of country, ushering in balanced regional development.