Stamp Duty: Levied by the Union and Appropriated and Planned by the States

Stamp duty is a tax levied on various documents and transactions such as property agreements, share transfers, and loan agreements. In India, stamp duty is levied by the Union government but is appropriated and planned by the states. Let's understand why this is the correct answer.

1. Taxation Structure in India:
In India, the power to levy and collect taxes is divided between the Union government and the state governments. The Union government is responsible for levying and collecting taxes on a wide range of subjects such as income tax, customs duty, and service tax. On the other hand, state governments have the authority to levy and collect taxes on subjects such as sales tax, stamp duty, and property tax.

2. Stamp Duty:
Stamp duty is a state subject under the Indian Constitution. It is governed by the Indian Stamp Act, 1899, which provides the legal framework for the levy and collection of stamp duty. The Act empowers the state governments to determine the rates and exemptions for stamp duty.

3. Union Government's Role:
Although stamp duty is a state subject, the Union government also has a role to play in its administration. The Union government sets the maximum rate of stamp duty that can be levied by the states. It also provides guidelines and regulations regarding stamp duty administration.

4. Appropriation and Planning:
Once the stamp duty is collected by the states, it is appropriated by them for their own use. The revenue generated from stamp duty is an important source of income for the state governments. They utilize this revenue for various developmental activities and infrastructure projects.

5. State Autonomy:
The appropriation and planning of stamp duty revenue by the states give them autonomy in determining their own fiscal policies. It allows them to have control over their financial resources and tailor their developmental plans according to their specific needs and priorities.

Conclusion:
In summary, stamp duty is levied by the Union government but is appropriated and planned by the states. This arrangement allows the states to have autonomy in determining their fiscal policies and utilizing the revenue generated from stamp duty for their own development.