Stamp duty is a tax collected by which level of government?

• A. Federal government
• B. State government
• C. Local government
• D. International organizations

Answer: (B)

Stamp duty is a tax on certain legal documents and property transactions, and who collects it depends on how a country divides tax powers. In many systems, the power to levy stamp duty sits with the state governments, not the federal government. This means the state revenue or tax department collects stamp duty, and the proceeds fund state services like roads, schools, and hospitals. The federal level typically handles other taxes such as income tax and GST, while local governments collect rates for local services. So, the level responsible for stamp duty is the state government. For example, when you buy a property, the stamp duty is paid to the state government’s revenue authority.