D. ---Of Valuations for DutyCentral

Section 25 of The Indian Stamp Act, 1899 in hindi

Where an instrument is executed to secure the payment of an annuity or other sum payable periodically, or where the consideration for a conveyance is an annuity or other sum payable periodically, the amount secured by such instrument or the consideration for such conveyance, as the case may be, shall, for the purposes of this Act, be deemed to be,--

(a)where the sum is payable for a definite period so that the total amount to be paid can be previously ascertained---such total amount;
(b)where the sum is payable in perpetuity or for an indefinite time not terminable with any life in being at the date of such instrument or conveyance----the total amount which, according to the terms of such instrument or conveyance, will or may be payable during the period of twenty years calculated from the date on which the first payment becomes due; and
(c)where the sum is payable for an indefinite time terminable with any life in being at the date of such instrument or conveyance---- the maximum amount which will or may be payable as aforesaid during the period of twelve years calculated from the date on which the first payment becomes due.

Summary

This provision sets the value for documents involving periodic payments like fixed yearly payments.
If payments are for a fixed time, the total amount to be paid over that period is the taxable value.
These values are used to determine the proper stamp duty under the Act.

Practical examples

1Mr. Gupta signs a document to give a charity 10,000 rupees every year forever. Under Section 25, the tax is based on 2 lakh rupees, which is the total for 20 years.

2Anuj agrees to pay his aunt 5,000 rupees a month for as long as she lives. Section 25 says the tax is calculated on the total amount payable over 12 years.

FAQ

1. How are periodic payments for a fixed 5-year term valued under Section 25 of the Indian Stamp Act?

According to Section 25 of the Indian Stamp Act, 1899, if the period is definite, the value is the total amount that can be calculated in advance.

Test yourself

Q1.Under Section 25 of The Indian Stamp Act, 1899, what is the valuation period for a periodic payment that lasts for an indefinite time not based on a life?

Q2.Under Section 25 of The Indian Stamp Act, 1899, how is the tax value determined for a payment that lasts for a fixed 10-year term?

Q3.Under Section 25 of The Indian Stamp Act, 1899, what is the maximum valuation period for an indefinite payment that ends when a specific person dies?

Q4.If a document provides for a payment forever and is not based on a life, Section 25 of The Indian Stamp Act, 1899 values it at what duration?

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