PUNJAB FINANCE ACT 2006

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THE PUNJAB FINANCE ACT 2006 
(V of 2006) 
CONTENTS 
1. Short title and commencement. 
2. Amendments in the Court Fees Act, 1870 
3. Amendments in the Stamp Act, 1899 
4. Amendment in the Punjab Sales Tax Ordinance, 2000 
TEXT 
1
THE PUNJAB FINANCE ACT 2006 
(V of 2006) 
[30th June, 2006] 
An 
Act 
to reduce court fee, rationalize certain stamp duties and amend the Punjab Sales 
Tax Ordinance, 2000. 
Preamble.– Whereas it is expedient to reduce court fee, rationalize certain stamp 
duties and amend the Punjab Sales Tax Ordinance, 2000; 
 It is hereby enacted as follows:– 
1. Short title, extent and commencement. – (1) This Act may be called the 
Punjab Finance Act, 2006. 
(2) It shall extend to the whole of the Punjab. 
(3) It shall come into force on the first day of July 2006. 
2. Amendments in the Court Fees Act, 1870 (VII of 1870). – In the Court Fees 
Act, 1870 (VII of 1870), in Schedule I, in serial number 1, in column 3, under the 
heading “Proper Fee”:– 
(i) for the words “Eight and a half”, the words “Seven and a half” shall be 
substituted; and 
(ii) for the words “thirty four thousands”, the words “fifteen thousands” shall 
be substituted. 
3. Amendments in the Stamp Act, 18 99 (II of 1899). – In the Stamp Act, 1899 
(II of 1899), in Schedule I, the following amendments shall be made, namely:– 
(1) for Article 6, under the headings “Description of Instrument” and 
“Proper Stamp-duty”, the following shall respectively be substituted:– 
“6. AGREEMENT RELATING TO 
DEPOSIT OF TITLE DEEDS, PAWN 
OR PLEDGE, that is to say, any 
instrument evidencing an agreement 
relating to– 
 
                                                           
1This Act was passed by the Punjab Assembly on 23 June 2006; assented to by the Governor of the Punjab on 27 June 2006; 
and, was published in the Punjab Gazette (Extraordinary), dated 30 June 2006, pages 5027-29. 
 (1) the deposit of title -deeds or 
instruments constituting or being 
evidence of the title to any 
property whatever (other than 
marketable security), or  
 
 (2) the pawn or pledge of movable 
property, where such deposit, 
pawn or pledge has been made 
by way of security for the re -
payment of money advanced or 
to be advanced by way of loan or 
an existing or future debt– 
 
 (a) if such loan or debt is 
repayable on demand or more 
than three months from the 
date of the instrument 
evidencing the agreement; 
 
  (i) in the case of banking 
companies or other 
financial institutions, when 
the entire finance is not 
based on interest; and 
One-fifth of one percent, 
that is to say, 0.2% of the 
loan amount subject to a 
maximum of one 
hundred thousand 
rupees. 
  (ii) in any other case. One-fifth of one percent, 
that is to say, 0.2% of the 
loan amount. 
 (b) if such loan or debt is 
repayable not more than 
three months from the date 
of such instrument; 
 
 (i) in the case of banking 
companies or other 
financial institutions, when 
the entire finance is not 
based on interest; and 
One-tenth of one 
percent, that is to say, 
0.1% of the loan amount, 
subject to a maximum of 
fifty thousand rupees. 
 (ii) in any other case. One-tenth of one percent, 
that is to say, 0.1% of the 
loan amount.”; 
(2) for Article 27, under the headings “Description of Instrument” and “Proper 
Stamp-duty”, the following shall respectively be substituted:– 
“27. DEBENTURE OR 
PARTICIPATION TERM 
CERTIFICATE OR TERM FINANCE 
CERTIFICATE OR ANY OTHER 
INSTRUMENT OF REDEEMABLE 
CAPITAL OTHER THAN A 
COMMERCIAL PAPER (whether or 
not a mortgage debenture, a 
Participation Term Certificate, a Term 
Finance Certificate or any other 
instrument of redeemable capital), 
being a marketable security 
transferable by endorsement or by 
separate instrument of transfer or by 
delivery. 
One-twentieth of one 
percent, that is to say, 
0.05% of the face value 
per annum subject to a 
maximum of one million 
rupees. 
Explanation-I. The term “Debenture” 
includes any interest coupons 
attached thereto, but the amount of 
such coupons shall not be included 
in estimating the duty. 
 
Explanation-II. The term 
“Participation Term Certificate” 
means an instrument or certificate of 
a specified denomination called the 
face value or nominal value, issued 
by a company for raising capital, the 
holder whereof participates in the 
profit and loss of the company over 
such period to such  extent and on 
such conditions as may be specified 
at the time of its issue. 
 
Explanation-III. The term “Term 
Finance Certificate” means a fixed 
tenure instrument or certificate of a 
specified denomination called the face 
value or nominal value issued to raise 
capital by a body corporate in the form 
of transferable security.”; 
 
(3) in Article 40, under the headings “Description of Instrument” and “Proper 
Stamp-duty”, after clause (c), the following shall respectively be inserted:– 
“(d) (i) mortgage with b anking 
companies, that is to say, simple 
or legal mortgage for banking 
companies or other financial 
institutions, when the entire 
finance is not based on interest; 
and 
One-fifth of one percent, 
that is to say, 0.2% of 
the loan amount subject 
to a maximum o f one 
hundred thousand 
rupees. 
 (ii) in any other case. One-fifth of one percent, 
that is to say, 0.2% of the 
loan amount.”; 
(4) in Article 49, under the headings “Description of Instrument” and “Proper 
Stamp-duty”, for clause (b), the following shall re spectively be 
substituted:– 
“(b) when payable otherwise than on 
demand, including a commercial 
paper. 
One-fiftieth of one 
percent, that is to say, 
0.02% per annum of 
the amount payable.”; 
(5) in Article 62– 
(a) under the headings “Description of Instrumen t” and “Proper 
Stamp-duty”, for clause (b), the following shall respectively be 
substituted:– 
“(b) of Debenture or Participation Term 
Certificate or Term Finance 
Certificate or any other instrument of 
redeemable capital (other than 
Commercial Paper), wheth er 
mortgaged or not, being a 
transferable security, whether liable 
to duty or not except as provided for 
by section 8; and  
One-tenth of one 
percent, that is to say, 
0.1% of the face value 
of the instrument.”; 
 
(b) after clause (e), under the headings “De scription of Instrument” 
and “Proper Stamp -duty”, the following new clause (f) shall 
respectively be inserted:– 
“(f) of a promissory note, including a 
commercial paper, when payable 
otherwise than on demand.”. 
Nil. 
 
4. Amendment in the Punjab Sales Tax Or dinance, 2000 (II of 2000).–  In the 
Punjab Sales Tax Ordinance, 2000 (II of 2000), in the Schedule, in serial number 2, 
in sub-serial number (ii), for the words “funded by USAID” occurring after the words 
“campaign” and before the semicolon, the words and  dashes “financed out of funds 
provided under a grant-in-aid agreement” shall be substituted.