Unpacking the Impact: How Gujarat Stamp (Amendment) Act, 2025 Transforms Property Transactions

Introduction

Gujarat State Government has enacted significant amendments to the Bombay Stamp Act, 1958¹ (the Act) effective from 10-4-2025. These changes aim to protect property rights, reduce stamp duty evasion, and ensure proper revenue collection. The reforms are designed to benefit homebuyers and small business owners by making property transactions and loan procedures more affordable and accessible.

The amendments also target private financial organisations and banks, some of which have previously disbursed loans without clearly identifying the party responsible for paying stamp duty. Many such documents were not submitted for verification, resulting in revenue losses. The new rule mandates that banks ensure stamp duty is paid on mortgage deeds before approving loans.

Analysis of the amendments

(i) Changes in definitions

(a) Section 2(g) — Conveyance: Sub-clause (iv) originally included orders under Section 232² of the Companies Act, 2013³ and Section 44-A⁴ of the Banking Regulation Act, 1949⁵. The Amendment has broadened the scope of this sub-clause to encompass orders under: (a) Section 394⁶ of the Companies Act, 1956⁷; (b) Sections 230 – 234⁸ of the Companies Act, 2013; (c) Section 44-A of the Banking Regulation Act, 1949; (d) Sections 18 and 19⁹ of the Sick Industrial Companies (Special Provisions) Act, 1985¹⁰; (e) Section 31¹¹ of the Insolvency and Bankruptcy Code, 2016¹²; and (f) confirmations by the Central Government under sub-section (3) of Section 233¹³ of the Companies Act, 2013. Additionally, the amendment has expanded the language of the sub-clause to include events of amalgamation, arrangement, merger, demerger, or reconstruction of companies, banks, and institutions, beyond just mergers, amalgamations, and dissolutions. Furthermore, a significant addition is introduced through a new sub-clause (vi) that explicitly includes share transfer agreements (STAs) and/or share purchase agreements (SPAs), involving changes in a company’s management or controlling interest, under the ambit of this definition. This amendment eliminates ambiguities that were previously used to evade stamp duty, ensuring better compliance and significantly increasing revenue from major corporate restructuring deals. The description of Article 20(d) of Schedule I of the Act has also been amended in alignment accordingly with this amended definition.

(b) Section 2(l) — Instrument: An explanation has been added in this definition, which provides for situations where original documents are unavailable and states that if original documents are unavailable, certified or uncertified copies, photocopies, or extracts will be treated as original documents for stamp duty purposes. Essentially, this amendment would enable Revenue Authorities to charge certified and/or uncertified copies of original documents with the same duties under Schedule I of the Act, which is charged to their original counterparts. This change targets previous evasive practices where parties withheld original documents to avoid stamp duty.

(ii) Additional stamp duty

Section 3-A of the Act provides for a list of documents which shall be charged an additional stamp duty (commonly known as surcharge) of 40% (forty per cent) in addition to the rates specified in Schedule I of the Act. The amended Section 3-A adds “agreement or memorandum or agreement relating to deposit of title deeds” and “power of attorney authorising to sell or transfer immovable property without consideration or without showing any consideration” under this list.

(iii) Responsibility

(a) The amendment introduces a new Section 10-A, which assigns the responsibility of ensuring stamp duty payment on instruments (registered or unregistered) that create rights in favour of statutory bodies, institutions, local self-governments, semi-government organisations, banking or non-banking financial institutions, or any entity owned, controlled, or substantially financed by the Gujarat State Government, as notified by the Gujarat State Government. A designated person, authorised by such entities, shall be responsible for marking (defacing) as well as endorsing payment receipts using a method and/or instructions approved by the Gujarat State Government.

(b) Furthermore, vide insertion of Section 30-A, the responsibility for paying stamp duty on instruments mentioned in Section 30 of the Act, which create rights in favor of financial institutions such as banks, non-banking finance companies, housing finance companies, and similar entities, is placed on these financial institutions.

(iv) Time period

The amendment has substituted the second proviso of Section 17 to include the orders as have been included in the aforementioned Section 2(g)(iv) and the timeline for stamping such orders has been extended from the previous 30-day period to a more practical 60-day period.

(v) Build-operate-transfer

Section 30 of the Act specifies who shall be responsible for payment of stamp duty. The amendment has inserted a new clause (f-a) which specified that in the case of a build-operate-transfer (BOT) instrument, the one receiving such instrument/contract shall be liable to pay stamp duty. The rate of stamp duty payable on such BOT has also been provided by inserting Article 5(g-c) in Schedule I of the Act which states that the stamp duty applicable for projects under BOT system or any project built under other mode of public-private partnership which are not covered under any other existing article, whether with or without toll or free collection rights shall be 0.10% (point one per cent) of the amount agreed in the contract subject to maximum INR 25,00,000 (twenty-five lakh rupees) and minimum INR 5000 (five thousand rupees). Previously, the ambiguity surrounding these high-value contracts led to considerable compliance challenges. This Amendment offers clear financial predictability, benefiting developers, financiers, and government agencies, while significantly reducing legal disputes.

(vi) Adjudication

(a) The amendment has revised Explanation III(c) to Article 20 of Schedule I of the Act. This explanation provides for determining the market value of the shares of a company [used in determining the stamp duty applicable for the conveyance as described in Article 20(d) of Schedule I of the Act] when such shares are not listed or listed but not quoted on the stock exchange. Prior to this Amendment, there was no opportunity of being heard given to the company when the Collector determined such value, however, as a result of various litigations surrounding this matter, the amendment now provides for an opportunity of being heard to the transferee company before the Collector determines such market value.

(b) The amended Section 31 of the Act clearly sets standardised timelines for adjudication by the Collector¹⁴ i.e. 60 (sixty) days from execution within Gujarat and three months from the date of first receipt of such instrument in Gujarat. The adjudication fee for adjudication is fixed at INR 1000 (one thousand rupees).

(c) Vide insertion of sub-section (4), liability to pay simple interest, in accordance with Section 46(1) of the Act, is imposed on the person not paying stamp duty within the time period prescribed for such payment under the Act, and vide insertion of sub-section (5), presentation of instruments beyond the aforementioned time period shall now lead to such instruments being dealt in accordance with Section 33 of the Act.

(d) The amended Section 33 grants Revenue Authorities the power to request and inspect original documents if there is suspicion of inadequate stamp duty payments based on copies or extracts. It allows authorities to impose penalties [in accordance with amended Section 39(1)(b)], along with demanding payment of deficient stamp duty, immediately upon finding deficient stamp duty. This enhanced enforcement capability significantly strengthens compliance oversight, giving authorities clear tools to curb evasion.

(vii) Revised penalties

(a) The Amendment revises minimum penalties from INR 250 (two hundred and fifty rupees) to INR 1000 (one thousand rupees).

(b) Additionally, amended Sections 34 and 39 significantly revise the penalty structures. Parties who voluntarily correct deficient stamp duty will face a penalty of 2% (two per cent) of the deficient portion of the stamp duty, for every month or part thereof from the date of execution, subject to the minimum penalty being INR 300 (three hundred rupees), and the maximum penalty shall not exceed four times of the deficient stamp duty.

(c) However, if authorities discover the deficiency, the penalties increase to 3% (three per cent) of the deficient portion of the stamp duty, for every month or part thereof from the date of execution, subject to the minimum penalty being INR 300 (three hundred rupees), and the maximum penalty shall not exceed six times of the deficient stamp duty.

(d) Furthermore, under the amended Section 62-A, the penalty for breach of Section 68(2) of the Act, stands revised as maximum INR 25,000 (twenty-five thousand rupees) for the first offence; minimum INR 10,000 (ten thousand rupees) and maximum INR 50,000 (fifty thousand rupees) for the second offence; and maximum INR 1,00,000 (one lakh rupees) for third and subsequent offences.

(e) Moreover, by amending Section 70, the power of the State Government has been increased to frame rules which prescribe penalties for an amount equal to “two times the deficient duty” than the earlier cap of INR 500 (five hundred rupees).

(f) These changes clearly incentivises voluntary disclosure and severely penalises deliberate evasion, promoting greater stamp duty compliance.

(viii) Stamp duty refund

The amendment clarifies that refund applications must be filed within six months of stamp purchase, with minimum deductions set at INR 300 (three hundred rupees). This ensures a clear, predictable, and fair-refund process, benefiting both applicants and revenue officials by reducing ambiguity and disputes around refund claims.

(ix) Obligation to furnish information

The amendment inserts Sections 67-A and 67-B which mandate that institutions and entities must provide information requested by stamp duty officials. Failure to comply can result in penalties of up to INR 10,000 (ten thousand rupees) per violation, subject to the minimum penalty being INR 1000 (on thousand rupees) per violation. This measure ensures better transparency and compliance tracking, significantly reducing opportunities for evasion.

(x) Revised stamp duties

In early 2023, the Gujarat State Government on ad hoc basis doubled the 2011 Jantri (ready reckoner rates). By November 2024, they released new Jantri rates that were proposed 5 to 2000 times higher than the 2023 rates. This decision caused significant reactions from citizens, builders, and real-estate stakeholders. Although the new rates were initially set to take effect on 1-4-2025, their implementation will be delayed due to public feedback, administrative challenges, and other considerations. Despite the delay, the Gujarat State Government expects a significant increase in revenue from stamp duty and registration fees for 2025-2026, forecasting an additional INR 3300 crores (three thousand and three hundred crore rupees) in the State budget. It seems that the below provided revised stamp duties are in pursuance to such forecasts.

(a) Article 6 — Agreement or memorandum of agreement relating to deposit of title deeds, pawn, pledge or hypothecation; Article 14 — Bond; and Article 27(b)(ii) — Further charge through mortgage without possession:

Loan amount	Revised stamp duty
	Subject to maximum of INR 75,00,000 (seventy-five lakh rupees) in case of consortium bank.
Up to INR 1,00,00,000 (one crore rupees).	Subject to maximum of INR 5000 (five thousand rupees), 25 (twenty-five) paise for every INR 100 (one hundred rupees) or part thereof.
More than INR 1,00,00,000 (one crore rupees) but up to INR 10,00,00,000 (ten crore rupees).	25 (twenty-five) paise for every INR 100 (one hundred rupees) or part thereof.
More than INR 10,00,00,000 (ten crore rupees).	Subject to maximum of INR 15,00,000 (fifteen lakh rupees), 50 (fifty) paise for every INR 100 (one hundred rupees) or part thereof.

This Amendment is a welcoming deal for the parties involved in lending transactions since there now exists a maximum limit for stamp duty payable for loans up to INR 1,00,00,000 (one crore rupees), which was not the case pre-amendment. Moreover, by also introducing a cap in the case of consortium lending, this amendment has bought in clarity and structured duty, especially for high-value lending transactions.

(b) Article 12 — Articles of association of a company: Maximum stamp duty increased to INR 15,00,000 (fifteen lakh rupees) from earlier INR 5,00,000 (five lakh rupees).

(c) Article 20(d) ― Stamp duty revised to “subject to maximum fifty crore rupees and minimum ten thousand rupees for each transferor or transferee” from earlier “subject to maximum twenty-five crore rupees”. It seems that the Legislative Department has followed the rationale of the Supreme Court in Chief Controlling Revenue Authority v. Coastal Gujarat Power Ltd.¹⁵, while inserting the phrase “for each transferor or transferee”. This addition can be seen as aligning with Section 5 of the Act, which states that if an instrument involves multiple parties, it is considered a separate matter for each party. Similarly, the amendment suggests that there should be a distinct stamp duty for each transferor or transferee when an instrument records more than one transferor or transferee in a conveyance. We understand that the Gujarat State Government would bring more clarity on calculation of stamp duty on above.

(d) It is pertinent to note that while the amendment has included SPAs and/or STAs involving changes in a company’s management or controlling interest, under the ambit of Section 2(g), it has not provided for a specific stamp duty applicable to such conveyance.

(e) Article 30(a) — Lease with fixed rent and no premium:

Lease period	Revised stamp duty
Less than 1 (one) year.	INR 500 (five hundred rupees) for residential property and INR 1000 (one thousand rupees) for commercial property.
More than 1 (one) year but less than 5 (five) years.	One rupee for every hundred rupees or part thereof or the amount or value of the average annual rent reserved, subject to minimum of INR 1000 (one thousand rupees) for residential property and INR 5000 (five thousand rupees) for commercial property.
More than 5 (five) year but less than 15 (fifteen) years.	Two rupees for every hundred rupees or part thereof for the amount or value of the average annual rent reserved, subject to minimum of INR 10,000 (ten thousand rupees).
More than 15 (fifteen) year but less than 30 (thirty) years.	Three rupees for every hundred rupees or part thereof for the amount or value of the average annual rent reserved, subject to minimum of INR 20,000 (twenty thousand rupees).
More than 30 (thirty) year but less than 99 (ninety-nine) years.	2.5% (two point five per cent) of the consideration or market value of the property, whichever is higher.
More than 99 (ninety-nine) years.	Same duty as is leviable on a conveyance under Article 20 market value of the property which is the subject-matter of the lease or the amount of consideration, whichever is higher.

(f) Article 30-A which relates to leave and licence agreement relating to immovable property other than residential property stands deleted vide this amendment. However, this amendment has not provided for a substitute of the same, and therefore the question as to what stamp duty would be applicable to leave and licence agreement relating to immovable property other than residential property remains open. This might create unnecessary confusion amongst parties involved in such transactions as commercial leave and licence agreements are very common for businesses and commercial establishments.

(g) Article 36(c) — Stamp duty on a mortgage deed of a collateral or auxiliary or additional or substituted security, when primary security is stamped is to be now levied at flat INR 5000 (five thousand rupees) instead of the earlier INR 5 (five rupees) for every sum or INR 1000 (one thousand rupees) or part thereof. This Amendment is crucial since prior to this amendment, there used to arise instances when creating an additional mortgage over an immovable property used to drastically increase the cost of the loan for the borrower, and this resulted in multiple litigations. By limiting the stamp duty on additional securities to INR 5000 (five thousand rupees), such litigations would now be prevented.

(h) Article 49(a) — Relating to release deeds of ancestral property or its part, scope of which is expanded to explicitly include son and daughter of pre-deceased daughter, essentially crystallising rights of daughters on ancestral properties. Previously charged at 4.90% stamp duty for a deed of relinquishment executed by the heirs of a deceased daughter, the new rate is a flat INR 200 (two hundred rupees), easing the financial burden on families handling inheritance matters.

Conclusion

The Gujarat Stamp (Amendment) Act, 2025 brings comprehensive reforms to enhance property rights, reduce stamp duty evasion, and ensure proper revenue collection. By broadening definitions, introducing additional stamp duties, assigning clear responsibilities, extending timelines, and revising penalties, the amendments aim to improve compliance and transparency. These changes are expected to benefit homebuyers, small business owners, and financial institutions, while significantly boosting State Revenue and reducing legal disputes.