19 Annual Statement of Rates · 19.1 Annual Statement of Rates and stamp duty
19.1.1 Maharashtra Stamp Act 1958: instrument, conveyance, market value (s.2) and the ASR as the measure of true market value
Stamp duty in Maharashtra is charged on the instrument, and for a conveyance it is charged on the market value of the property or the consideration stated, whichever is higher; the Annual Statement of Rates (ASR) is the yardstick used to test that market value.
- MPSC ATP
- Standard level
- 9 min read
- Free
Core facts
- Act: Maharashtra Stamp Act, 1958. It was enacted as the Bombay Stamp Act, 1958 (Bom. LX of 1958) and later renamed.
- Key definitions in s.2:
- s.2(f) Collector
- s.2(g) conveyance
- s.2(h) duly stamped
- s.2(i) executed / execution = signed / signature
- s.2(k) impressed stamp (includes franking-machine impressions)
- s.2(l) instrument
- s.2(na) market value
- Instrument (s.2(l)): any document by which a right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded.
- Market value (s.2(na)): the price the property would fetch if sold in the open market on the date of execution, or the consideration stated in the instrument, whichever is higher.
- Charging section: s.3. Instruments listed in Schedule I are chargeable at the rates shown there.
- Conveyance is Article 25 of Schedule I. Gift is Article 34 and lease Article 36.
- ASR (ready reckoner) = yearly average rates of land and buildings, zone-wise, issued under the 1995 Rules to fix the true market value for stamp duty.
- Purpose of the ASR: to check under-valuation of instruments and evasion of stamp duty.
Explained
Why the State levies stamp duty (Seventh Schedule)
| Entry | What it covers |
|---|---|
| List III, Entry 44 | Stamp duties other than judicial stamps (but not the rates) |
| List I, Entry 91 | Rates for bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, share transfers, debentures, proxies, receipts |
| List II, Entry 63 | Rates for all other documents, including conveyances of land |
So the duty on a sale deed of land is a State rate, fixed by the Maharashtra Act.
Conveyance (s.2(g))
- Covers a conveyance on sale and every instrument by which property, movable or immovable, is transferred inter vivos and which is not otherwise provided for in Schedule I.
- The definition is inclusive. It also covers:
- decrees or orders of civil courts that transfer property
- orders of the High Court or NCLT on amalgamation, merger or reconstruction of companies
- Explanation to Article 25: an agreement to sell immovable property is treated as a conveyance when possession is handed over (or agreed to be handed over) under it. Duty is then payable as on a conveyance.
How "market value" works with the ASR
| Step | What happens |
|---|---|
| 1 | Parties state the consideration in the deed |
| 2 | Value is worked out from the ASR rate × area, after applying the ASR guidelines |
| 3 | Duty is charged on the higher of the two |
| 4 | If the registering officer thinks the value is not truly set forth, he refers the deed to the Collector under s.32A |
Worked example 1: consideration below ASR
- Consideration in the sale deed: ₹60 lakh.
- ASR value: flat of 120 sq m built-up × ₹60,000 per sq m = ₹72 lakh.
- Market value for duty = higher of 60 and 72 = ₹72 lakh.
Worked example 2: consideration above ASR
- Consideration: ₹95 lakh. ASR value: ₹80 lakh.
- Duty is charged on ₹95 lakh. The ASR is a floor for checking, not a ceiling.
Worked example 3: duty at a given rate
- Market value ₹72 lakh, duty rate taken as 5% (as given in the question).
- Duty = 72,00,000 × 5% = ₹3,60,000.
The actual rate depends on the area (municipal corporation, council, rural) and on surcharges added by municipal laws. Questions state the rate to use.
Common traps
- ✗ "Market value is defined in s.2(g)." ✓ s.2(na) defines market value; s.2(g) defines conveyance; s.2(l) defines instrument.
- ✗ "Stamp duty is always charged on the consideration written in the deed." ✓ It is charged on the market value or the consideration, whichever is higher.
- ✗ "The ASR rate is a ceiling; duty can never exceed it." ✓ If the consideration is higher than the ASR value, duty is on the consideration.
- ✗ "An agreement to sell never attracts conveyance duty." ✓ If possession is given under it, it is treated as a conveyance (Explanation to Article 25).
- ✗ "'Executed' in the Stamp Act means registered." ✓ It means signed (s.2(i)).
- ✗ "The Act was originally the Maharashtra Stamp Act, 1958." ✓ It was enacted as the Bombay Stamp Act, 1958.
Quick revision
- Maharashtra Stamp Act 1958 = former Bombay Stamp Act 1958.
- s.2(l) instrument; s.2(g) conveyance; s.2(na) market value; s.2(h) duly stamped; s.2(i) executed = signed.
- Market value = open-market price on date of execution or consideration, whichever is higher.
- s.3 charging section; Schedule I Article 25 = conveyance.
- Agreement to sell + possession = conveyance.
- ASR = ready reckoner; zone-wise average rates for true market value.
- ASR purpose: prevent under-valuation and duty evasion.
- Undervalued deed → registering officer refers to Collector under s.32A.
- ASR land rate is also used for development charge, UDCPR premiums and TDR indexation.
Go deeper: Deeper, Mains writing (beyond what MPSC ATP usually asks)
Deeper Advanced
- Two parallel values. s.2(na) builds the "higher of" rule into the definition itself. That is why a buyer cannot reduce duty by writing a low price in the deed.
- ASR is a guide, not conclusive. The Collector must decide the true market value on the facts of each case. A party can lead evidence that the property is worth less than the ASR figure (for example because of a reservation, encroachment or a defect in title). The ASR guidelines themselves list many such adjustments.
- Link with land acquisition. Under s.26(1)(a) of the RFCTLARR Act, 2013, one of the three criteria for market value of acquired land is the market value, if any, specified in the Indian Stamp Act, 1899 for registering sale deeds or agreements to sell in that area. In Maharashtra this is read with the ASR. Compensation takes the highest of the three criteria.
- ASR outside the Stamp Act. Many other Maharashtra laws borrow the ASR land rate:
- development charge under the MRTP Act (Second Schedule: % of rates of developed land in the "Stamp Duty Ready Reckoner")
- premium FSI, ancillary FSI and other premiums under UDCPR 2020 (on the ASR land rate "without considering the guidelines therein")
- TDR indexation under UDCPR Reg. 11.2.6(ii): X = (Rg / Rr) × Y, where Rg and Rr are ASR land rates of the generating and receiving plots in the generating year
- Instrument, not transaction. Duty attaches to the document. An oral transfer attracts no duty, but a sale of immovable property worth ₹100 or more can be made only by a registered instrument (s.54, Transfer of Property Act, 1882), so in practice the deed is unavoidable.
Mains writing Mains writing
- Frame: the ASR turns the abstract "open-market price" of s.2(na) into a published, zone-wise number. It protects revenue and makes valuation predictable.
- Analysis points:
- ASR rates are averages. Within one zone, actual values vary widely, so the ASR can over-value poor properties and under-value prime ones.
- High ASR rates raise duty and also raise development charges and UDCPR premiums, which feed into housing prices.
- A low ASR encourages cash ("black money") components in property deals.
- Because RFCTLARR s.26 uses the stamp value, an outdated ASR also lowers acquisition compensation.
- Way forward: annual revision based on registered sale data; GIS-based value zones; easy online challenge of ASR values; publish the method and data used.
- Example: a buyer pays ₹60 lakh for a flat valued at ₹72 lakh in the ASR. Duty is on ₹72 lakh; the buyer can contest it before the Collector under s.32A with evidence of lower value.
Practise this topic. Questions on Annual Statement of Rates, with answers explained.
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