Haryana to reduce stamp duty on loan documents

Vijay C Roy

Tribune News Service

Chandigarh, August 14

As high value stamp duty on all types of loan documents is proving a stumbling block in lending process, the Haryana government has decided to reduce it. The reduction in duty would help persons, especially from economically weaker section (EWS) and low-income group to avail loans under DRI (differential rate of interest), loan for purchase of two-wheeler and loan against bank’s fixed deposits and recurring deposits.

For executing any type of loan agreement between a bank and the borrower, stamp paper is needed. Normally, the borrowers have to pay for the stamp paper. 

Last year in October, the state government had increased the stamp duty steeply through a notification issued under Indian Stamp (Haryana Amendment) Bill 2018.  Stamp duty on term loan agreement was raised from Rs 10 to Rs 2,000 and also on hypothecation agreement from Rs 10 to Rs 2,000. 

Further, agreement of cash credit, loan and overdraft was increased from Rs 120 to Rs 2,000. Similarly, there has been a massive hike on the stamp duty on agreement deed for education loan — from Rs 10 to Rs 2,000. Also, stamp paper for executing agreement for loan against gold jewellery was raised from Rs 10 to Rs 2,000. The steep hike impacted the small borrowers severely. 

Small borrowers have to shell out Rs 2,000 as cost of stamp paper even for availing a personal loan of Rs 10,000.

As the hike in stamp duty was impacting the borrowers, the State Level Bankers Committee (SLBC) took up the matter to the State functionary. In a meeting held today Dr Rajesh Yaduvanshi, chairman, State Level Bankers Committee and executive director, Punjab National Bank, said the stamp duty was on the higher side for persons of EWS category and low-income group. He asked the Haryana government to intervene into the matter as it relates to common people, rural masses and persons of EWS.  

Acceding to the request, Haryana Additional Chief Secretary (Finance & Planning) TVSN Prasad assured the bankers that the state government was working on the modalities and they will reduce the stamp duty.

As the hike in stamp duty was hurting small borrowers, Yaduvanshi further proposed that it should be reduced on all types of loans. He suggested there should be no stamp duty for all types of loans up to Rs 5 lakh or advance taken against fixed deposits or recurring deposits. He requested the state functionaries to fix Rs 1,000 as a stamp duty for loans above Rs 5 lakh to Rs 10 lakh and Rs 2,000 for loans above Rs 10 lakh.