Stamp Act, 1899 — section 23

23. Instruments reserving interest..—Where interest is expressly made payable by the terms of an instrument, such instrument shall not be chargeable with duty higher than that with which it would have been chargeable had no mention of interest been made therein. 4 [23A. Certain instruments connected with mortgages of marketable securities to be chargeable as agreements.—(1) Where an instrument (not being a promissory note or bill of exchange.)

(a)is given upon the occasion of the deposit of any marketable security by way of security for money advanced or to be advanced by way of loan, or for an existing or future debt, or 1 The word “cheque” rep. by the Indian Finance Act, 1927 (Act No. V of 1927), s.5. 2 Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (Ordinance No. XXI of 1960), s. 3 and 2nd Sch. (with effect from the 14th October, 1955), for “the Provinces and the Capital of the Federation” which had been subs. by A.O., 1949, Arts. 3(2) and 4, for “British India”. 3 Sub. Section 2 Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (Ordinance No. XXVII of 1981) s. 5 and Sch. IV (Only to the extent of Islamabad Capital Territory). 4 Ins. by the Indian Stamp (Amendment) Act, 1904 (Act No. XV of 1904), s. 3.

(b)makes redeemable or qualifies a duly stamped transfer, intended as a security, of any marketable security, it shall be chargeable with duty as if it were an agreement or memorandum of an agreement chargeable with duty under l [Article No.5 (c)] of Schedule I.

(2)A release or discharge of any such instrument shall only be chargeable with the like duty.] 24. How transfer in consideration of debt, or subject to future payment, etc., to be charged.— Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance upon the property or not, such debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty: Provided that nothing in this section shall apply to any such certificate of sale as is mentioned in Article No. 18 of Schedule I. Explanation.— In the case of a sale of property subject to a mortgage or other incumbrance, any unpaid mortgage-money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale: Provided that, where property subject to a mortgage is transferred to the mortgagee, he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage. Illustrations

(1)A owes B Rs.1,000. A sells a property to B, the consideration being Rs.500 and the release of the previous debt of Rs.1,000. Stamp-duty is payable on Rs.1,500.

(2)A sells a property to B for Rs.500 which is subject to a mortgage to C for Rs.1,000 and unpaid interest Rs.200. Stamp-duty is payable on Rs.1,700.

(3)A mortgages a house of the value of Rs.10,000 to B for Rs.5,000. B an afterwards buys the house from A. Stamp-duty is payable on Rs.10,000 less the amount of Stamp-duty already paid for the mortgage.