Contributors

Mr. Bhushan Shah, Partner
Ms. Neha Lakshman, Associate Partner
 

Introduction

The Maharashtra Stamp (Fourth Amendment) Bill, 2026 (“Bill”) was passed by the Maharashtra Legislative Assembly on 7 July 2026. The Bill proposes to amend Schedule I of the Maharashtra Stamp Act, 1958 (“Act”) to introduce a distinct charging entry for instruments of financial and bank guarantee.

Present Position

Instruments of financial and bank guarantee, are not presently specified as a distinct category the Schedule. Such instruments are presently charged with stamp duty under Article 54 (Security Bond). 

Since these instruments are extensively used in commercial transactions by both private parties and the State, the Government considers it necessary to provide a separate Article with differentiated rates for different classes of such instruments.

Currently, when guarantee is extended or renewed, the same stamp duty that is chargeable on the first instrument is levied again, even where the guaranteed amount remains unchanged, resulting in repetitive stamp duty. The proposed amendment, provide relief from repetitive duty on renewals where the amount guaranteed remains unchanged.

Proposed Changes

New Article 34A: The Bill inserts a new Article 34A in Schedule I, which prescribes the following rates of stamp duty:

Implications

Once enacted, the landscape regarding stamp duty on financial and bank guarantees will change significantly. Parties executing or renewing guarantees in Maharashtra should monitor the Amendment closely and assess the stamp duty impact on pending and proposed transactions.

This update was released on 13 Jul 2026.

The views expressed in this update are personal and should not be construed as any legal advice. Please contact us directly on +91 22 40565252 or contact@mhcolaw.com for any assistance.

Legal Update Team
MANSUKHLAL HIRALAL & COMPANY
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