Stamp Duty On Bank Loan Agreement

In several States, notifications have been issued concerning the cancellation and/or reduction of stamp duty on debt relief operations. For example, Rajasthan has adopted stamp duty applicable to any agreement or document executed in favour of ARCs1 for the transfer or assignment of rights or shares in financial assets of banks or financial institutions, in accordance with section 5 of SARFAESI. In addition, in Maharashtra, stamp duty on instruments for securitizing loans or selling underlying debts has been reduced to 0.1% (zero 1% of the securitized loan or debt awarded) up to a limit of 1,00,000 (Rupees a lake)2. The Allahabad Supreme Court`s ruling in the Kotak case could prove to be a welcome step towards reducing stamp duty on guilty transactions.

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