Kerala Stamp Duty on Loan Agreement
Kerala Stamp Duty on Loan Agreement: All You Need to Know
When it comes to taking loans, paying attention to the legal formalities is crucial. In India, one such legal requirement is the payment of stamp duty on loan agreements. Stamp duty is a tax levied by the government on various types of documents, including loan agreements, to make them legal and enforceable.
If you are planning to take a loan in Kerala, it is important to understand the stamp duty implications. In this article, we will discuss everything you need to know about Kerala Stamp Duty on Loan Agreement.
What is Stamp Duty on Loan Agreement?
A loan agreement is a legal document that outlines the terms and conditions of the loan, such as the loan amount, interest rate, repayment period, and other relevant details. Stamp duty is a tax that is levied on such loan agreements to make them legally enforceable.
Stamp duty is a state subject, which means that the rate and rules of stamp duty vary from state to state. In Kerala, the stamp duty on loan agreements is governed by the Kerala Stamp Act, 1959, and the Kerala Stamp Rules, 1960.
Stamp Duty Rates on Loan Agreement in Kerala
The stamp duty rates on loan agreements in Kerala vary depending on the loan amount. As per the Kerala Stamp Act, 1959, the stamp duty for loan agreements is as follows:
– For loan agreements up to Rs. 5,000, the stamp duty is Rs. 5.
– For loan agreements between Rs. 5,000 and Rs. 10,000, the stamp duty is Rs. 10.
– For loan agreements between Rs. 10,000 and Rs. 50,000, the stamp duty is Rs. 20.
– For loan agreements between Rs. 50,000 and Rs. 1,00,000, the stamp duty is Rs. 50.
– For loan agreements between Rs. 1,00,000 and Rs. 5,00,000, the stamp duty is Rs. 100.
– For loan agreements above Rs. 5,00,000, the stamp duty is Rs. 200.
It is important to note that the stamp duty rates mentioned above are subject to change as per the decisions taken by the Kerala government from time to time.
Payment of Stamp Duty on Loan Agreement in Kerala
The stamp duty on loan agreements in Kerala can be paid in two ways:
1. Non-Judicial Stamp Paper: A loan agreement can be executed on a non-judicial stamp paper of the appropriate value as per the stamp duty rates mentioned above. The stamp paper must be purchased in the name of any one of the parties to the loan agreement.
2. Electronic Franking: In Kerala, loan agreements can also be executed through electronic franking, which involves the use of a franking machine to print the stamp duty on the loan agreement. The payment of stamp duty in this case can be made at any authorized bank or post office.
It is important to note that the stamp duty must be paid within 30 days of executing the loan agreement, failing which a penalty of 2% per month on the stamp duty amount may be charged.
Conclusion
Taking a loan is a significant financial decision, and it is important to comply with the legal requirements to avoid any legal hassles in the future. The payment of stamp duty on loan agreements is one such legal requirement, and it is important to understand the stamp duty rates and payment options in your state.
In Kerala, the stamp duty rates on loan agreements vary depending on the loan amount, and it can be paid through non-judicial stamp paper or electronic franking. Make sure to pay the stamp duty within the stipulated time to avoid any penalty.
