Mumbai, July 7, 2026: The Maharashtra Legislative Assembly on Tuesday passed a key amendment to the 'Maharashtra Stamp Act, 1958', introducing a separate stamp duty category for bank and financial guarantees and significantly reducing the duty payable on their renewal. The move is expected to provide major relief to industries, businesses and infrastructure projects that routinely rely on bank guarantees.
Assembly Passes Amendment Bill
The amendment Bill was introduced by Revenue Minister Chandrashekhar Bawankule, who said the changes would simplify commercial transactions, reduce the financial burden on businesses and bring greater clarity to the state's stamp duty framework.
Under the earlier provisions, bank guarantees and financial guarantees did not have a separate classification under Schedule I of the Maharashtra Stamp Act. As a result, such instruments were treated on a par with security bonds under Article 54, attracting full stamp duty.
Moreover, every renewal or extension of a bank guarantee required payment of the same stamp duty again, even when the guaranteed amount remained unchanged, increasing compliance costs for businesses.
Relief On Bank Guarantee Renewals
The amended law introduces a dedicated category for bank and financial guarantee instruments, enabling the government to prescribe separate and appropriate stamp duty rates based on different categories of guarantees.
One of the most significant changes is that if the value of the bank guarantee remains unchanged, its renewal or extension will no longer attract the full stamp duty applicable to the original instrument. Instead, only a nominal stamp duty will be payable, eliminating the long-standing issue of double taxation on renewals.
Also Watch:
The government said the amendment would provide substantial financial relief to the trade and industry sector by lowering transaction costs and streamlining documentation.
It is also expected to improve transparency and simplify the renewal process for bank guarantees used in commercial contracts, government tenders and infrastructure projects.
To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/
