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Section 28: Direction as to duty in case of certain conveyances

Indian Stamp Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1899
Section 27 All 78 Sections Schedule I (Arts 1–65) Section 29

Legal Commentary & Landmark Judgments: Section 28

Section 28 of the Indian Stamp Act, 1899 regulates stamp duty on sub-sales, intermediate transfers, and multi-party property conveyances, ensuring fair tax assessment by preventing double taxation on intermediate contracts while charging duty on the final actual consideration paid by sub-purchasers.

  • Sub-Sales Prior to Conveyance [Section 28(1)]: Where property contracted to be purchased is sub-sold to another person before conveyance, the conveyance executed directly by the original vendor to the sub-purchaser is chargeable with ad valorem duty strictly in respect of the consideration moving from the sub-purchaser.
  • Apportionment for Distinct Sub-Purchasers [Section 28(2)]: Where property contracted to be purchased by one person is sub-sold in distinct parts to different persons before conveyance, conveyances of each part executed directly by the vendor to sub-purchasers are charged with ad valorem duty on the consideration of each distinct part.
  • Relief for Intermediate Purchasers: Shields the original contracting party from having to execute and stamp an intermediate conveyance, legalizing tripartite direct conveyances and preventing cascading stamp levies on unconsummated agreements.
Key Landmark Precedents:
  • Secretary of State v. Laldas (1909) 12 Bom LR 16: The Bombay High Court held that Section 28 is an equitable statutory mechanism preventing duplicate stamp duty on sub-sales; where a property is sub-sold prior to formal conveyance, the conveyance executed to the ultimate purchaser is assessed solely on the final purchase price.
  • Board of Revenue v. S. Swaminathan AIR 1955 Mad 344: The Madras High Court confirmed that tripartite sale deeds involving an original vendor, a confirming party/original vendee, and a sub-purchaser are chargeable with stamp duty under Section 28 only on the consideration paid by the sub-purchaser.
Courtroom Practice & Strategic Litigation Guidance:

When structuring real estate sub-sales or assignment of builder-buyer allotment rights, execute a tripartite conveyance under Section 28 joining the original owner, the intermediate assignor as confirming party, and the final purchaser. This lawfully restricts conveyance duty to the actual consideration paid by the final buyer, defeating demands for dual stamp duty on both the original agreement and the final sale.

Section 27 All 78 Sections Schedule I (Arts 1–65) Section 29