Report No. 67
The history of the particular provision regarding policies of insurance may be referred to. In the Act of 1860, Schedule A, entries 43 and 44 levied stamp duty on a policy of insurance on life or upon ship etc. or goods on ship etc. or freight of ship etc. (There was no definition of "policy").
44.8. The Stamp Act (10 of 1862), Schedule A, entries 55 and 56, levied a duty on certain policies of insurance [roughly speaking, life insurance, insurance against loss or damage by fire upon any building or property (not being ship etc.) and policy of insurance upon any ship etc. or goods or board or freight etc.] The Stamp Act of 1869, First Schedule, item 3, levied a duty an "Policy of life insurance", but the definition of "policy" in that Act1 stated that it did not include a policy of life insurance2. The Act of 1879 contained a definition of "policy of insurance" which included, inter alia a life Policy3. Life Insurance Policies, thus became chargeable under "other insurances" by Article 49(c) of the Act of 1879.
1. Cf. The Stamp Act, 1870 (33 & 34 Vic., C. 97).
2. Section 11(23), Act 18 of 1869.
3. Section 3(15), Act 1 of 1879.
44.9. Upto 1879, policy of accident insurance was not specifically mentioned. It was chargeable (if at all) only on the assumption that the duty on a "policy of insurance" covered accident insurance policies also, by reason of the definition in the Acts of 1869 and 1879.
44.10. Thus, in the Stamp Act of 1879, section 3(15) (so far as is relevant to accident insurance) read as follows:-
"(15) 'Policy of Insurance' means any instrument by which one person in consideration of a premium, engages to indemnify another against loss, damage or liability arising from an unknown or contingent event. It includes a life policy.....
[Schedule II, exemption 14(a) of the Act of 1879 exempted a letter of cover or engagement to issue a policy of insurance, subject to a proviso].
44.11. Fire insurance became a separate clause under Act 1 of 1888, which amended the Act of 1879. The Act of 1888 added a clause as to the renewal of a policy of fire insurance, which was remitted to Article 47 by Act 5 of 1906. Act 6 of 1894 added two clauses including a policy of sea insurance, whether of ship or of cargo, which now forms part of section 2(20)1.
1. See Mulla Stamp Act (1963), p. 40.
44.12. Accident Insurance became a separate clause under the Act of 1899 (i.e. the present Act). The proviso relating to policies wherein the annual premium for accident insurance does not exceed Rs. 2.50 per Rs. 1,000, was introduced by the Repealing and Amending Act 18 of 1928 to give statutory recognition to a reduction of duty granted previously1 by notification No. 3 dated the 4th February, 1928.
1. See Donogh's Indian Stamp UM, edited by Rustomji, (1935), pp. 698-699.
44.13. The Article was re-arranged in the Act of 1899, and the words in Division D-"Life insurance or other insurance not specifically provided for" were added to include all other forms of insurance1-2.
1. The Statement of Objects and Reasons appended to the Bill, says (under Article 47), "The drafting of this article has been altered to make its provisions clearer."
2. As to the suggestion made in 1898 to reduce the duty on accident insurance, see para. 33, infra.
44.14. Act 43 of 1923 transferred some of these to Division B, by adding therein the words "and other clauses of insurance not elsewhere included in this Article, covering goods, merchandise, personal, effects, crop and other property against loss or damage." .
44.15. Division CC of Article 47 was inserted by Act 15 of 1925, providing for stamp duty on the policy of indemnity insurance under the Workmen's Compensation Act, 1923. It was introduced in consequence of the passing of the Workmen's Compensation Act, 1923.
44.16. A specific provision for the levy of stamp duty on a policy of "group insurance" was made in the Act 43 of 1955, by substituting, in Division D of Article 47, the words "or group insurance or other insurance" for the words "or other insurance".
44.17. Certain amendments, not important for the present purpose, were made in 1961, besides the amendment made in 1958 to implement decimal coinage.
44.18. English Law.-
The law in England may now be summarised. In the (English) Stamp Act, 1891,1 as originally enacted, there were three heads of charge relating to policies of insurance, namely, "Policy of Life Insurance", "Policy of Sea Insurance" and "Policy of Insurance against Accident". The stamp duty for accident policy was one pence. By the Act of 1920,2 the duty on accident policies was increased to six pence. But, by the Act of 1959,3 the separate heads of "Sea Insurance", and "Insurance against accident" were omitted. Consequential changes in the provisions in the nature of definition were also made.
1. Stamp Act, 1891 (54 & 55 Vict., C. 38) First Schedule, head of charge "Policy of Insurance etc."
2. Finance Act, 1920 (10 & 11 Geo. 05, C. 18).
3. Finance Act, 1959, s. 30.
44.19. Schedule to the English Act.-
The Schedule to the English Act now reads thus1:-
|Policy of Insurance other than life insurance||
|Policy of Life Insurance-|
|Where the sum insured does not exceed £10||
|Exceeds £10 but does not exceed £25||
|Policy of Insurance other than life insurance||
|Exceeds £25 but does not exceed £500|
|For every full sum of £50, and also for any fractional|
|part of £50, of the sum insured||
|Exceeds £500 but does not exceed £1000 for every full sum of £100, and also for any fractional part of £100, of the amount increase||
|For every full sum of £1,000 and also for any fractional|
|part of £1,000, of the amount insured||
1. Stamp Act, 1891, (54 & 55 Vict., C. 38) as amended up-to-date, see Monroe Stamp Duties (1964), pp. 213-214.