Section 4 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 4 of the Indian Stamp Act, 1899 stops a single transaction from being charged to full duty on every paper that helps to complete it. Where several instruments are used to complete one sale, mortgage or settlement, only the principal instrument bears the full duty and each of the others bears one rupee. The parties choose which one is principal, but the duty then charged is the highest that any of the instruments would have attracted.
Under section 4(1), in a sale, mortgage or settlement completed through several instruments, the principal instrument alone is chargeable with the duty prescribed in Schedule I for the conveyance, mortgage or settlement, and each of the others is chargeable with one rupee. Under section 4(2), the parties decide which is the principal instrument, but the duty on it shall be the highest duty that would be chargeable on any of the instruments employed. Section 4(3) has a different rule for securities.
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 duty on the principal instrument; the figure of one rupee is the amount printed in the section. If your transaction involves more than one document and you want the set reviewed together, a contract review before signing is the safer course.
Section 4(1): the principal instrument and one rupee on the rest
Sub-section (1) applies "in the case of any sale, mortgage or settlement", where "several instruments are employed for completing the transaction". Three elements are present:
- The transaction is a sale, a mortgage or a settlement. Section 4 does not reach other kinds of transaction.
- Several instruments are employed for completing that one transaction.
- The consequence: "the principal instrument only shall be chargeable with the duty prescribed in Schedule I, for the conveyance, mortgage or settlement, and each of the other instruments shall be chargeable with a duty of one rupee instead of the duty (if any) prescribed for it in that Schedule".
The words "if any" matter. Some of the other instruments might have attracted no duty at all in Schedule I. Even so, the section fixes one rupee as the duty for each of the others. The text consulted does not say that a document must be stamped when it would otherwise have no duty; it only says what the chargeable duty is. The terms "conveyance", "mortgage-deed" and "settlement" are defined in section 2; see our article on those definitions.
Section 4(2): the parties choose, and the highest duty applies
Sub-section (2) reads: "The parties may determine for themselves which of the instrument so employed shall, for the purposes of sub-section (1), be deemed to be the principal instrument". The copy prints "instrument" in the singular where "instruments" may be intended.
The proviso then limits the freedom: "the duty chargeable on the instrument so determined shall be the highest duty which would be chargeable in respect of any of the said instruments employed". So the parties cannot reduce the total by naming the cheapest document as principal. The principal instrument carries the highest of the duties, and the others carry one rupee each. Section 6 uses the same idea of the highest duty for a single document that falls under two descriptions; it is covered in its own article.
Section 4(3): securities
Sub-section (3) was inserted by Act 7 of 2019, section 13, with effect from 1 July 2020 (the footnote adds that it was earlier notified with effect from 9 January 2020 followed by 1 April 2020). It begins "Notwithstanding anything contained in sub-sections (1) and (2)". In the case of any issue, sale or transfer of securities, the instrument on which stamp-duty is chargeable under section 9A is the principal instrument for the purpose of the section, and "no stamp-duty shall be charged on any other instruments relating to any such transaction".
For securities the parties therefore do not choose. The section 9A instrument is the principal one, and the other documents relating to the transaction are charged nothing. The route for securities is covered in the article on section 9A.
At a glance
| Question | Section 4 answer |
|---|---|
| Which transactions? | Sale, mortgage or settlement |
| What is charged on the principal instrument? | The duty prescribed in Schedule I for the conveyance, mortgage or settlement, but see the proviso |
| What is charged on each of the others? | One rupee, instead of any duty prescribed for it |
| Who decides which is principal? | The parties (sub-section (2)) |
| What limits their choice? | The duty on the chosen instrument is the highest that any of the instruments would attract |
| What about securities? | The instrument chargeable under section 9A is principal; no duty on any other instrument (sub-section (3)) |
A worked example with invented figures
Prakash and Sheela buy a flat from a builder. The transaction is completed with three papers: a deed of sale, a supplementary agreement fixing the possession date, and a separate deed recording the builder's undertaking on a few fittings. Assume, purely to show the mechanics, that the duties which would have been chargeable on the three papers under the law of the relevant State are Rs 500, Rs 300 and Rs 200. These are not real rates.
If the parties name the supplementary agreement as the principal instrument, the proviso says the duty on it must be the highest of the three, that is Rs 500. The deed of sale and the third deed then carry one rupee each, so the total is Rs 502. If they name the deed of sale as principal, the result is the same. What the parties cannot do is name the cheapest paper as principal and pay only Rs 200 on it. The real figures come from the State where the documents are executed.
A caution: section 4(1) speaks of instruments "employed for completing the transaction". A document that does something different, such as a separate loan, is a different matter. Section 5 deals with a single document that comprises several distinct matters and is covered in its own article.
Need help with a multi-document transaction?
When a sale, mortgage or settlement runs across several papers, it pays to decide early which will be the principal instrument and to check that each other paper is described accurately. Our contract review and vetting service can go through the set, so that the choice is made deliberately and not by accident.
Key takeaways
- Section 4 applies only to a sale, mortgage or settlement completed through several instruments.
- The principal instrument bears the Schedule I duty; each other instrument bears one rupee.
- The parties choose the principal instrument, but it carries the highest duty chargeable on any of the instruments.
- For securities, the instrument chargeable under section 9A is the principal one and no duty is charged on the others.
- The duty on the principal instrument is fixed by the State where it is executed for most instruments.
Read next
- Section 5 of the Indian Stamp Act, 1899: instruments relating to several distinct matters
- Section 6 of the Indian Stamp Act, 1899: instrument falling under several descriptions
- Section 3 of the Indian Stamp Act, 1899: instruments chargeable with stamp duty
- Stamp duty on agreement to sell
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.