The Kerala Stamp (Amendment) Act, 2004 came into force on 2nd day of December 2003. The cardinal objective of the present amendment is to reduce the rate of Stamp duty and to provide for a ceiling on the Surcharge leviable by the local authority.

The amendment was effected in view of the recommendations of the Law Reforms Committee, constituted by the Government to revise the laws applicable to the State of Kerala. The main recommendations of the Committee were reduction of the Stamp duty and the imposition of stamp duty based on the fair value of the property.

The Government took steps to fix the fair value of property through out Kerala. Accordingly a draft fair value was published and thereafter objections were called for from the public. Due to state vide objection Government withdrew the fair value fixed and directed the Registering authority to register the documents without considering the fair value and on the value fixed by the parties in the document. Now this procedure is going on.

Before the passing of this Amendment Act, the stamp duty levied on an instrument of conveyance for a property situated within the Municipal area was 8.5% of the amount or value of consideration. The addition to the stamp duty, surcharge was levied at 4% in Panchayat and Municipality areas and 5% in Corporation area. In addition to these, a registration fee for conveyance was levied at 2%. As such the effective rate of duty and registration fee for conveyance would be 15.5% in Corporation area, 14.5% in Municipal area and 12% in Panchayat area. Due to hike in the value of property and the high rate of stamp duty there is a tendency among the Public to undervalue instruments of conveyance, which results in loss of revenue and inconvenience to the public.

The Amendment Act inserted the new section 30A, which provides for a ceiling on the surcharge on stamp duty. The new section says that the rate of surcharge on stamp duty leviable on any instrument by a Grama Panchayat or a Municipality shall not exceed two per cent of the amount on which such stamp duty is payable.

As per the Amendment Act, the rate of stamp duty for the conveyance of an immovable property situated with in the Municipalities and Municipal Corporation will be the following: