Articles 40 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Four Articles of Schedule I deal with the life of a mortgage. Article 40 charges the mortgage-deed itself, and splits on whether possession is given. Article 32 charges a further charge on mortgaged property. Article 41 charges a mortgage of a crop. Article 54 charges the reconveyance when the mortgage is paid off. This article sets out each as the central Schedule prints it, with the duty column rebuilt where the copy prints it out of line.
A mortgage-deed with possession is charged at the conveyance duty (Article 23) on the amount secured, and one without possession at the bond duty (Article 15) on the amount secured. A collateral or additional security is charged eight annas as printed. A further charge, a crop mortgage and a reconveyance have their own measures. These are the central Schedule's amounts and not the duty payable today: stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed.
This article is based on the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021). Later amendments should be checked. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so check that State's schedule; this article explains the central Act only. For the meaning of "mortgage-deed", see our article on the definitions of conveyance, bond, lease, mortgage-deed and settlement.
A note on how the copy prints the duty column
For Article 32 and Article 54 the duty column is printed out of line with the descriptions. The duties are printed in the right order but several lines above or below the rows they belong to. We have rebuilt them in sequence, and the official text should be checked.
Article 40: mortgage-deed
Article 40 is headed "Mortgage-deed, not being an agreement relating to deposit of title-deeds, pawn or pledge (No. 6), bottomry bond (No. 16), mortgage of a crop (No. 41), respondentia bond (No. 56), or security bond (No. 57)". The footnote shows the words "an agreement relating to deposit of title-deeds, pawn or pledge (No. 6)" as substituted by Act 15 of 1904, s. 8, for an older description.
| Article | Description of instrument as printed | Proper stamp-duty as the central Schedule prints it |
|---|---|---|
| 40(a) | When possession of the property or any part of the property comprised in the deed is given by the mortgagor or agreed to be given | The same duty as a Conveyance (No. 23) for a consideration equal to the amount secured by such deed |
| 40(b) | When possession is not given or agreed to be given as aforesaid | The same duty as a Bond (No. 15) for the amount secured by such deed |
| 40(c) | When a collateral or auxiliary or additional or substituted security, or by way of further assurance for the abovementioned purpose where the principal or primary security is duly stamped | Eight annas, printed against the clause and again against "for every sum secured not exceeding Rs. 1,000" and "for every Rs. 1,000 or part thereof secured in excess of Rs. 1,000" |
The footnote shows that the words "At the time of execution" were omitted from clause (b) by Act 15 of 1904, s. 8. The copy prints the duty for clause (c) as "Eight annas" twice, once beside the heading and once beside the two sum rows. We quote it as printed and do not harmonise it.
Explanation. A mortgagor who gives to the mortgagee a power-of-attorney to collect rents, or a lease of the property mortgaged or part of it, is deemed to give possession within the meaning of the Article. This pulls a mortgage without a formal handover of possession into clause (a) when such a power or lease is given.
Exemptions. (1) Instruments executed by a person taking advances under the Land Improvement Loans Act, 1883 (19 of 1883) or the Agriculturists' Loan Act, 1884 (12 of 1884), or by their sureties, as security for repayment of such advances; (2) a letter of hypothecation accompanying a bill of exchange. A third exemption was omitted by Act 15 of 1904, s. 8, and we say nothing about it. The old Acts are quoted as printed; the reader should check the current law for the corresponding provision.
A borrower or lender who wants the security documents read together can use our loan documentation support service.
Article 32: further charge
Article 32 charges an instrument imposing a further charge on mortgaged property. It splits by the kind of original mortgage.
| Article | Description of instrument as printed | Proper stamp-duty as the central Schedule prints it |
|---|---|---|
| 32(a) | When the original mortgage is one of the description in clause (a) of Article 40 (that is, with possession) | The same duty as a Conveyance (No. 23) for a consideration equal to the amount of the further charge secured by such instrument |
| 32(b)(i) | When the mortgage is one of the description in clause (b) of Article 40 (that is, without possession), if at the time of execution of the further charge possession of the property is given or agreed to be given | The same duty as a Conveyance (No. 23) for a consideration equal to the total amount of the charge (including the original mortgage and any further charge already made) less the duty already paid on the original mortgage and further charge |
| 32(b)(ii) | The same, if possession is not so given | The same duty as a Bond (No. 15) for the amount of the further charge secured by such instrument |
Article 41: mortgage of a crop
Article 41 covers a mortgage of a crop, including any instrument evidencing an agreement to secure the repayment of a loan made on any mortgage of a crop, whether or not the crop is in existence at the time. The duty depends on the repayment period.
| Article | Description of instrument as printed | Proper stamp-duty as the central Schedule prints it |
|---|---|---|
| 41(a) | Loan repayable not more than three months from the date of the instrument | One anna for every sum secured not exceeding Rs. 200, and One anna for every Rs. 200 or part thereof in excess |
| 41(b) | Loan repayable more than three months but not more than eighteen months from the date of the instrument | Two annas for every sum secured not exceeding Rs. 100, and Two annas for every Rs. 100 or part thereof in excess |
The footnote shows "eighteen months" as substituted by Act 5 of 1906, s. 7, for "one year", and shows "Two annas" as substituted by Act 15 of 1904, s. 8, for "Four annas".
Article 54: reconveyance of mortgaged property
| Article | Description of instrument as printed | Proper stamp-duty as the central Schedule prints it |
|---|---|---|
| 54(a) | If the consideration for which the property was mortgaged does not exceed Rs. 1,000 | The same duty as a conveyance (No. 23) for the amount of such consideration as set forth in the reconveyance |
| 54(b) | In any other case | Ten rupees |
Section 29(c) places the expense of a conveyance, "including re-conveyance of mortgaged property", on the grantee in the absence of agreement to the contrary. Section 29(a) names Articles 32 and 40, putting the expense of those instruments on the person drawing, making or executing them. Our article on section 29 sets out the list.
How the Articles fit together
The ladder runs from the first mortgage through to its redemption. The first mortgage-deed falls under Article 40(a) or (b). If more money is raised on the same property, Article 32 applies, taking account of what has already been paid. Collateral security for the same debt is clause (c) of Article 40 if the principal security has been duly stamped. A crop loan goes to Article 41. When the debt is cleared and the property is reconveyed, Article 54 applies. The deposit of title-deeds is not a mortgage-deed under Article 40 but falls under Article 6; see our article on Article 6.
An example with invented names
Patel Agro mortgages its warehouse to a lender for Rs. 450 and gives possession. Article 40(a) charges the conveyance duty on a consideration of Rs. 450, which falls in the band that exceeds Rs. 400 and does not exceed Rs. 500, for which the central Schedule prints five rupees. Had possession not been given, Article 40(b) would use the bond scale, where the band for more than Rs. 400 and up to Rs. 500 prints two rupees eight annas. The difference between the two shows why the possession test matters. If Patel Agro then gives the lender a power-of-attorney to collect the rents, the Explanation treats possession as given. All of these are the central text's figures, and the State fixes the duty actually payable.
For the law of mortgage itself, see our guide to mortgage deed drafting and essential clauses and our page on stamp duty on a mortgage deed. The Stamp Act text consulted does not explain mortgages.
Need help with a mortgage or a loan security?
If you are creating, adding to or releasing a mortgage and want the documents read against the Articles, our team can review them under our loan documentation support service. We read what each document says and then the State's schedule.
Key takeaways
- Article 40 splits on possession: conveyance duty on the amount secured with possession, bond duty without it; collateral security is eight annas as printed.
- An attorney to collect rents, or a lease to the mortgagee, counts as possession under the Explanation.
- Article 32 prices a further charge by the kind of original mortgage and gives credit for duty already paid.
- Article 41 charges a crop mortgage by the repayment period; Article 54 charges the reconveyance.
- All amounts are the central text's; the State where the instrument is executed fixes the duty payable.
Read next
- Article 6 of Schedule I: deposit of title deeds, pawn or pledge
- Articles 15, 16, 26, 34, 56 and 57 of Schedule I: bonds
- Section 58 of the Transfer of Property Act, 1882: mortgage defined and the six kinds of mortgage
- Types of mortgage under the Transfer of Property Act: a guide
Disclaimer: Based on the consolidated text of the Indian Stamp Act, 1899 published by the Department of Revenue, whose latest amendment shown is Act 13 of 2021, as consulted on 2 October 2026. Only the central text is covered: stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, and State amendments, rules, notifications and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.