Section 24 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.
Section 24 of the Indian Stamp Act, 1899 deals with how the consideration for a transfer is counted when the property is transferred in return for a debt, or subject to a payment such as a mortgage. In short, the debt or the mortgage money is treated as part of the consideration on which ad valorem duty is charged. A proviso, an Explanation and three illustrations show how it works.
Where property is transferred in consideration, wholly or in part, of a debt due to the transferee, or subject to the payment or transfer of money or stock (whether or not it is a charge on the property), that debt, money or stock is deemed part or the whole of the consideration on which ad valorem duty is charged. On a sale of mortgaged property, the unpaid mortgage money and interest due are part of the consideration. A mortgagee who buys the property may deduct duty already paid on the mortgage.
How to read this article
This article is based on the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021); later amendments should be checked. It explains the central Act only. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so the State must be checked for the rate; this section tells you the amount on which that rate is applied, not the rate. If you are buying a property that carries a mortgage or loan, our legal due diligence service can help you work out the full consideration before you pay.
The Illustrations printed under the section use small figures from the original Act, such as Rs. 1,000 and Rs. 500. They are quoted as printed and are used here only to show how the amount for duty is found.
The main rule
The section reads: "Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or incumbrance upon the property or not, such debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty".
It has two limbs:
- In consideration of a debt due to the transferee. If the transferee is owed a debt and the property is transferred in return, wholly or partly, for that debt, the debt is counted as consideration.
- Subject to payment or transfer of money or stock. If the transfer is made subject, "certainly or contingently", to the payment or transfer of money or stock, that money or stock is counted as consideration. It does not matter whether it is "a charge or incumbrance upon the property or not".
The words "certainly or contingently" widen the second limb: a payment that is only contingent is still counted. The text consulted does not say how a contingent amount is to be valued, so no method is given here.
The first proviso: certificates of sale
The proviso says: "nothing in this section shall apply to any such certificate of sale as is mentioned in Article No. 18 of Schedule I." A certificate of sale granted by a court or revenue officer under Article 18 is outside section 24. The Article is covered in the article on conveyance, part performance and certificate of sale.
The Explanation and its proviso
The Explanation reads: "In the case of a sale of property subject to a mortgage or other incumbrance, any unpaid mortgage money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale".
So on a sale of mortgaged property, the buyer's price is not the only figure. The unpaid mortgage money, with interest due on it, is added.
The proviso to the Explanation then deals with one case: "where property subject to a mortgage is transferred to the mortgagee, he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage."
The deduction is from the duty payable, not from the consideration. It is available to the mortgagee, who is the transferee in that case. Section 16 provides a way to record on the second instrument the duty paid on the first; see our article on sections 13 to 16.
The three illustrations
The Act prints these three illustrations under the section.
| Illustration | Facts as printed | Amount on which duty is payable, as printed |
|---|---|---|
| (1) | A owes B Rs. 1,000. A sells a property to B, the consideration being Rs. 500 and the release of the previous debt of Rs. 1,000 | Rs. 1,500 |
| (2) | A sells a property to B for Rs. 500 which is subject to a mortgage to C for Rs. 1,000 and unpaid interest Rs 200 | Rs. 1,700 |
| (3) | A mortgages a house of the value of Rs. 10,000 to B for Rs. 5,000. B afterwards buys the house from A | Rs. 10,000 less the amount of stamp-duty already paid for the mortgage |
The arithmetic is simple. In (1), Rs. 500 plus the released debt of Rs. 1,000 is Rs. 1,500. In (2), Rs. 500 plus Rs. 1,000 plus Rs. 200 is Rs. 1,700. In (3), the copy states the amount as Rs. 10,000, the value of the house, less the duty already paid on the mortgage, which is the deduction in the proviso to the Explanation.
A worked example of our own
Ishaan owes his friend Zoya Rs 8 lakh. He transfers a plot to her, with Zoya paying Rs 12 lakh in cash and the earlier Rs 8 lakh debt being released. The plot is also subject to a mortgage to a bank for Rs 5 lakh, with Rs 30,000 interest due, which Zoya takes over. On the words of section 24 and its Explanation, the amount treated as consideration is Rs 12 lakh plus Rs 8 lakh plus Rs 5 lakh plus Rs 30,000, a total of Rs 25.30 lakh. This is the amount on which ad valorem duty is worked out; the rate is that of the State where the transfer is executed. These figures are invented.
If the buyer were the bank itself, the mortgagee, it would be entitled under the proviso to deduct the duty already paid in respect of the mortgage from the duty payable on the transfer.
For the legal meaning of sale and mortgage in property law, see our posts on sale of immovable property and the kinds of mortgage; those concern the Transfer of Property Act, 1882, and state nothing from this Act.
Need help working out the true consideration?
The price in a sale deed may not be the whole consideration for duty. If you are buying or selling a property that is mortgaged, or that is transferred against a debt, a legal due diligence review can set out the amounts that the Act counts before the deed is drawn.
Key takeaways
- A debt due to the transferee, and money or stock the transfer is subject to, count as consideration.
- It does not matter whether the payment is a charge on the property, or only contingent.
- On a sale of mortgaged property, unpaid mortgage money and interest due are part of the consideration.
- A mortgagee who buys the mortgaged property may deduct the duty already paid on the mortgage.
- Certificates of sale under Article 18 are outside the section.
Read next
- Section 25 of the Indian Stamp Act, 1899: valuation of annuities and periodical payments
- Section 28 of the Indian Stamp Act, 1899: duty on conveyances in parts and to sub-purchasers
- Section 23A of the Indian Stamp Act, 1899: instruments on pledge of marketable securities
- Stamp duty on sale deed and conveyance deed
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.