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The Maharashtra Stamp (Fourth Amendment) Act, 2026 (“Act”) was introduced to amend Schedule I appended to the Maharashtra Stamp Act, 1958 (“Stamp Act”), by inserting a new Article 34A to create a dedicated stamp duty entry for instruments of Financial or Bank Guarantee. The Act was notified and came into force from 22 July 2026.
As per the Statement of Objects and Reasons accompanying the Maharashtra Stamp (Fourth Amendment) Bill, 2026, instruments of bank and financial guarantee, despite being extensively used in commercial transactions did not have a distinct category under Schedule I. Instead, they were charged with duty under Article 54, which relates to Security Bonds. This has also meant that renewal or extension of an existing guarantee attracted the same stamp duty as the original instrument, even where the guaranteed amount remained unchanged.
To address this, the Act has now expressly introduced Article 34A in Schedule I as a new category dealing with financial and bank guarantees, which prescribes differentiated rates depending on the nature and value of the guarantee as follows:
| Sr. No. | Category of Financial or Bank Guarantee | Rate of Stamp duty |
| 1. | (i) If the guarantee amounts secured by such deed does not exceed INR 5,00,000 | 0.1% of the amount secured subject to a minimum of INR 500 |
| (ii) In any other case | 0.3% of the amount secured subject to a maximum of INR 20,00,000 | |
| (iii) Where the guarantee is issued in favour of the Government Corporation, Local Authority, or Statutory Body in respect of public works or public procurement | INR 500 | |
| (iv) renewal or extension of an existing financial or bank guarantee without increase in the guaranteed amount | 0.25% of the amount secured by such deed subject to a maximum of INR 25,000 | |
| 2. | Letter of Guarantee | INR 500 |
This introduction of Article 34A is of particular relevance to banks, NBFCs and other entities furnishing guarantees to government departments and public bodies in Maharashtra. Entities executing high-value guarantees stand to benefit from the cap on duty under the general rate, while those with guarantees that are periodically renewed without any change in the secured amount would benefit from the lower renewal rate. However, given that the expression “Financial Guarantee” has not been defined, questions remain regarding the scope of Article 34A, including whether it extends to personal guarantees securing financial indebtedness and performance guarantees relating to contractual obligations. Accordingly, further regulatory clarification or judicial guidance may be required to address these interpretative issues.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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