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Section 24: How transfer in consideration of debt, or subject to future payment, etc., to be charged

Indian Stamp Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1899
Section 23 All 78 Sections Schedule I (Arts 1–65) Section 25

Legal Commentary & Landmark Judgments: Section 24

Section 24 of the Indian Stamp Act, 1899 governs the stamp duty assessment on transfers of property in consideration of pre-existing debts or subject to future payments, incumbrances, or mortgages, deeming the debt or incumbrance to constitute part of the chargeable ad valorem consideration.

  • Deemed Consideration Architecture: Where property is transferred in consideration of any debt due, or subject certainly or contingently to the payment or transfer of any money or stock (whether constituting an incumbrance or not), such debt or payment is deemed part of the chargeable consideration.
  • Proviso for Mortgaged Property Transfers: Where property is sold subject to a mortgage, duty already paid on the mortgage deed is allowed as a deduction or rebate from the conveyance duty to prevent double taxation, provided both instruments are between the same parties.
  • Purchaser of Equity of Redemption: The Explanation clarifies that when a purchaser buys property subject to an existing mortgage, the principal amount remaining due on the mortgage together with accrued interest forms part of the consideration on which conveyance stamp duty is levied.
Key Landmark Precedents:
  • Board of Revenue, U.P. v. Rai Saheb Sidhnath Mehrotra AIR 1965 SC 1092: The Supreme Court held that under Section 24, where a property is transferred subject to a mortgage, the unpaid mortgage debt forms part of the consideration for the transfer, and ad valorem duty is chargeable on the aggregate of the cash consideration and the outstanding mortgage debt.
  • Collector of Belgaum v. Shivlingappa (1911) ILR 35 Bom 255: The Bombay High Court held that Section 24 prevents evasion of stamp duty through debt-swap transactions; an executant cannot escape conveyance duty by transferring property under the guise of adjusting a pre-existing unsecured loan.
Courtroom Practice & Strategic Litigation Guidance:

In distressed asset sales, SARFAESI private treaties, or debt-for-equity swaps, disclose the exact quantum of debt being set off or assumed by the transferee. Calculate conveyance duty on the aggregate of the cash consideration plus the assumed liability, as omitting the debt quantum violates Section 24 and exposes the deed to Section 47A / Section 64 evasion proceedings.

Section 23 All 78 Sections Schedule I (Arts 1–65) Section 25