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Stamp Duty Hike: Karnataka Notifies Amendment

On February 3, 2024, the State Government notified the Karnataka Stamp (Amendment) Act, 2023, after it received the assent of the Governor. The Amendment Act raises stamp duty for various instruments including powers of attorney, articles of association and memorandum of association of companies, affidavits, certified copies, etc.

The Bill to hike stamp duty was tabled in the Legislative Assembly on December 7, 2023. Days later, the Bill came to be passed. The same is in line with the Government’s aim to collect Rs.25,000 Crore from stamp duty and registration fees in the current fiscal.

Notably, the stamp duty payable on agreements relating to the deposit of title deeds, pawn or pledge, as described under Article 6 of the Schedule to the 1957 Act, has been increased to 0.5 per cent of the loan or debt amount.

In case of affidavits, the stamp duty was earlier set at Rs.20. The same has been enhanced to Rs.100. The rate applicable on adoption deeds has been increased from Rs.500 to Rs.1,000. For divorce deeds, the rate has been revised from Rs.100 to Rs.500.

Apart from revising the existing rates, the Amendment Act adds a new article in the Schedule, titled “if relating to bank guarantee”.  For instruments relating to paper bank guarantees, a stamp duty of Rs.300 would be payable by the person drawing, making, or executing such instrument. If it relates to e-bank guarantees, the applicable rate is Rs.200.