Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, where being or constituting a charge or incumbrances upon the property or not, such debt, money or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty :
Provided that nothing in this section shall apply to any such certificate of sale as is mentioned in [Article No. 16] of Schedule I.
Explanation.––In the case of a sale of property subject to a mortgage or other incumbrance, any unpaid mortgage money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale :
Provided that, where property subject to a mortgage is transferred to the mortgagee, he shall be entitled to deduct from the duty payable on the transfer the amount of any duty already paid in respect of the mortgage.
Illustrations
(1) A owes B Rs. 1,000, A sells a property to B, the consideration being Rs. 500 and the release of the previous debt of Rs. 1,000 Stamp duty is payable on Rs. 1,500.
(2) A sells a property to B for Rs. 500 which is subject to a mortgage to C for Rs. 1,000 and unpaid interest Rs. 200. Stamp-duty is payable on Rs. 1,700.
(3) A mortgages a house of the value of Rs. 10,000 to B for Rs. 5000. B afterwards buys the house from A. Stamp-duty is payable on Rs. 10,000 less the amount of stamp-duty already paid for the mortgage.