Section 27 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 27 is a one-sentence duty on the person who writes or signs an instrument: the consideration, and every other fact that decides whether duty is payable or how much, must be stated in the instrument itself, fully and truly. It is the rule that makes the rest of the Act workable, because the Collector, the court and the stamp office can only charge duty on what the document shows.
Section 27 says that "the consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein". The words apply to the instrument itself, not to a side letter. The consequence of leaving something out sits in section 64, which punishes an omission made with intent to defraud the Government with a fine that may extend to five thousand rupees, and in section 31(2), which lets the Collector ask for an affidavit to prove that the facts are truly stated.
The text and its place in the Act
The section reads, in the copy consulted: "27. Facts affecting duty to be set forth in instrument.—The consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it its chargeable, shall be fully and truly set forth therein." The printed text has a small slip, "it its chargeable"; it is quoted as printed and does not change the meaning.
This article follows the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021), and 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 the State of execution must be checked. This article explains the central Act only and gives no State rate. If you want a deed checked before it is signed, our agreement drafting service covers exactly this point.
Section 27 comes in Part D of Chapter II, the part on valuations for duty, between section 26 (see Section 26) and section 28 on conveyances in parts. Where those sections tell you how to value, section 27 tells you what the document must say.
Taking the sentence apart
"The consideration (if any)"
Consideration is the price or return given for the instrument. The words "if any" show that some instruments have none. Where there is consideration, the instrument has to state it. That covers money, and it equally covers anything else given in return, such as property transferred in exchange, a debt released, or a liability taken over. If the duty rises with the consideration, an instrument that omits or understates it is not "fully and truly" set out.
"All other facts and circumstances affecting the chargeability"
This is the wider limb. Many things other than price decide the duty. Whether a document is chargeable at all, which description of instrument it falls under, and whether a particular exemption applies are all facts of this kind. The section does not list them. It uses a general test: any fact that affects chargeability or the amount of duty must be set forth.
"Or the amount of the duty"
Some facts do not decide whether duty is payable but do decide how much. The text covers both, with the words "or the amount of the duty with which it is chargeable".
"Fully and truly"
Two separate requirements. "Fully" means nothing material is left out. "Truly" means what is stated is correct. A document may be complete but false, or accurate but incomplete. Either fails the test.
"Set forth therein"
The facts must appear in the instrument. An oral understanding, a side letter or a separate document does not satisfy the section, because the person who reads the instrument must be able to see the facts on which the duty was computed.
Examples of what has to be shown
The Act does not give a checklist for section 27, but its other sections show where facts matter. The table below ties each to the section where the Act itself speaks.
| Situation | Fact that should appear in the instrument | Where the Act speaks |
|---|---|---|
| Transfer for a debt or subject to a mortgage | The debt and the mortgage, since they form part of the consideration | Section 24 |
| Property bought for one price and conveyed in parts | A distinct consideration for each part | Section 28, sub-section (1) |
| Several instruments for one transaction | Which is the principal instrument | Section 4 |
| One document dealing with several distinct matters | Each matter, so that the duties can be added | Section 5 |
| Mining lease with royalty | The royalty or share of produce reserved | Section 26, first proviso |
Who is bound
The section says only that the facts "shall be fully and truly set forth". It does not name the person bound. Its consequence in section 64 is aimed at two kinds of person: one who "executes any instrument" in which the facts are not fully and truly set forth, and one "employed or concerned in or about the preparation of any instrument" who neglects or omits to set them forth. That second group is the one drafters should note. A lawyer, a chartered accountant or an advisor who prepares a deed is within the wording if the intent to defraud the Government is present.
What follows if the facts are not set forth
Section 27 itself states no penalty. Other sections attach consequences.
- Section 64. Any person who, with intent to defraud the Government, executes an instrument that does not fully and truly set forth the facts required by section 27, or, being concerned in its preparation, neglects or omits to set them forth, or does any other act calculated to deprive the Government of any duty or penalty under the Act, is punishable with a fine which may extend to five thousand rupees. The fine is quoted as printed. See Sections 63 and 64. Intent to defraud is part of the offence, so an honest mistake does not fall within it, but the section does not make the record any less necessary.
- Section 31. When a person asks the Collector for his opinion on the duty, the Collector may require an abstract of the instrument and "such affidavit or other evidence as he may deem necessary to prove that all the facts and circumstances affecting the chargeability of the instrument with duty ... are fully and truly set forth therein". The proviso protects the person who furnishes evidence: it cannot be used against him in a civil proceeding except in an inquiry about the duty, and on paying the full duty he is relieved from any penalty he may have incurred by reason of the omission to state truly the facts. See Section 31.
- Sections 33 and 35. An instrument that is not duly stamped is impounded and cannot be admitted in evidence until the shortfall is made good. If the true facts would have led to a higher duty, the instrument is not duly stamped, so these sections come into play.
A drafting routine that fits section 27
- State the consideration in full, including any part that is not money.
- Recite any mortgage, charge or debt the buyer takes over, and the amount.
- Say if the property is conveyed in parts, and give the part of the price for each.
- Describe the instrument by its real nature, not by a name chosen for convenience.
- Put every fact the duty depends on into the document, not into a covering letter.
- Keep the working papers that show how the figure was reached, so an affidavit under section 31 can be given quickly.
Our guide to the parts of a deed shows where such facts usually sit in a document, and how to calculate stamp duty step by step explains the general method. For a conveyance, see stamp duty on a sale deed.
Need help with the wording of a deed?
A deed is easiest to fix before it is signed. Our team can review the consideration clause, the recitals and the schedule of facts so that the instrument states what section 27 requires. Start with our agreement drafting support and tell us the State where you will execute.
Key takeaways
- Section 27 requires the consideration and every fact affecting chargeability or the amount of duty to be fully and truly set forth in the instrument.
- Both completeness and accuracy are needed, and the facts must be in the instrument itself.
- Section 64 punishes an omission made with intent to defraud the Government with a fine which may extend to five thousand rupees, and reaches persons concerned in preparing the instrument.
- Section 31(2) lets the Collector call for an affidavit or other evidence on the same facts.
- The duty itself comes from the schedule of the State where the instrument is executed.
Read next
- Section 26 of the Indian Stamp Act, 1899: where the value cannot be ascertained
- Section 28 of the Indian Stamp Act, 1899: conveyances in parts and to sub-purchasers
- Sections 63 and 64 of the Indian Stamp Act, 1899: penalties for not cancelling stamps and not stating the true consideration
- The parts of a deed: parties, recitals, operative part and schedules
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.