Stamping
of documents
1.
Section
17 of Indian Stamp Act, 1899 stipulates that the instruments executed in India
must be stamped before or at the time of execution.
2.
Sections
35 of Stamp Act states that the instruments not duly stamped are inadmissible
in evidence.
3.
In
order to constitute a document as duly stamped
the following things are to be satisfied
4.
The
document should be stamped adequately.
5.
Correct
description of stamps is to be used.
6.
The
stamps used are duly cancelled.
7.
Only
one instrument can be written on one stamp paper (u/s 14)
Stamp Acts:
8.
Central
act – Entry 91 of Union list - 10 instruments (Revenue Stamps) for DPN, Bills
of Exchange, Share transfer, Bill of
Lading, insurance policy, debentures, proxies, letter of credit, money receipts
and cheques (exempted from stamp duty)
9.
Respective
state acts – (special adhesive / embossed) for agreements, PAs, AOD, DBCs,
mortgage deeds etc. other than those mentioned above
10.
SD
23 and SD 23A to be stamped with Re.1.00 revenue stamp + stamp duty applicable
as per state stamp duty
Types of stamps
1.
Judicial stamps- used in courts for paying
court fees etc.
2.
Non-judicial stamps (NJ stamps)- validity- 6
months in some states if purchased in the name of the party)
3.
NJ
stamp paper may be E – Stamp paper also
4.
If
E stamps are purchased, verify the code of transaction before purchase
5.
NJ
stamp should normally be purchased at the time of documentation
6.
Postal stamps
Non judicial stamps
7.
Adhesive stamps – like revenue stamps, share
transfer stamps, notary stamp
8.
They
are affixed on DPN, money receipts, balance confirmation letter etc.
9.
Special adhesive stamps – substitute for non judicial
stamp paper
10.
Can
be affixed on all types of agreements and deeds
11.
Embossed or impressed stamps – Non judicial paper having
embossed/impressed stamp from Registrar/ sub registrar after remitting required
stamp duty to SRO
Stamping of documents
12.
Section
12 states that the adhesive stamps are to be cancelled in such a manner that
they cannot be used again.
13.
An
adhesive stamp can be cancelled either by writing the name or by signing by the
executants across the stamp.
14.
Though drawing of diagonal or parallel lines
on the stamp is treated as cancellation, it is advisable to get the adhesive
stamps cancelled by signature or thumb impression (in case of illiterates) of
the executants.
15.
An
instrument with adhesive stamp not cancelled in the above manner will be
treated as unstamped and is made inadmissible in evidence. {u/s 12(1)}
Use of Non judicial
stamp paper
16.
The
entire document may be written or typed on the stamp paper OR
17.
A
few lines of the printed document may be cancelled by pen and
18.
The
same should be written on the stamp paper
19.
A
portion of the printed matter should come on each sheet of stamp paper
20.
Each
stamp paper should be signed by borrower/s
21.
The
cancelled portion on the printed document should be duly authenticated by borrowers
with their full signatures
Execution of documents
Execution
outside India – (u/s 18)
22.
Any
document other than DPN, or BOE
23.
stamped
at the time of execution relevant to that place
24.
is
subsequently brought to India, will have to be stamped once again by the first
holder
25.
Within
03 months of its arrival to India.
Execution in more than one state
26.
Stamp
duty to be paid relevant to the state where it is signed first
27.
Then
sent to second state for signature/s
28.
In
case duty is high in 2nd state, difference has to be paid before the
person signs
29.
Then
the document to be sent to stamp office which certifies the documents
30.
If
J & K is one of the state, full duty applicable to both the state is
payable
Stamping of documents
31.
Earlier
Instruments like D.P. Note, Bill of Exchange (Usance), Acknowledgement of Debt,
which are not duly stamped will be
void-ab-initio (i.e., invalid from the very beginning). Such instruments were
not admissible in evidence even on payment of deficit and penalty. (u/s 35)
32.
But
now all documents can be validated by paying penalty as per amendment to Indian
stamp act in 2006 (court judgments
varies)
33.
Other
types of documents can be admissible on payment of deficit stamp duty and
penalty which may be up to a maximum of
ten times the duty chargeable, with a minimum of Rs.5/-.
34.
Section
19 – A promissory note / bill of exchange
(Demand /
usance) executed outside India should be stamped by its first holder in India
before presenting it for acceptance, payment or negotiation.
|
DP note amount
|
Stamp value
|
|
Not exceeding Rs. 250/-
|
10 paisa
|
|
Exceeding Rs.250/- but
less than Rs. 1000/- |
15 paisa
|
|
Exceeding Rs. 1000/-
|
25 Paisa
|
Local stamp acts:
35.
The
state governments are permitted to amend the Indian stamp act or enact
completely new acts or prescribed different rate of stamp duty for instruments
not covered under Entry 91 of the union list.
Adjudication:
36.
As
per the provisions of Section 31 and 32 of Stamp act, an instrument before
execution or after execution with stamp or without stamp can be brought before
the Collector within 30 days of execution for adjudication.
37.
On
payment of required fee, the Collector decides as to the adequacy of stamp and
certifies accordingly.
38.
In case of unstamped/under stamped documents
executed, he will collect the deficit duty and prescribed fee and then certify
accordingly.
39.
No penalty is levied for insufficient stamping
or un stamping of a documents produced to Collector under section 31, within 30
days of its execution.
Impounding
40.
State
stamp law authorities can enter the premises of Bank for inspection.
41.
They
have powers to impound/seize any improperly stamped documents. (u/s 33)
42.
Registrar
of stamps / collector has powers to levy penalty.
43.
Offences
against stamp laws are liable for prosecution even after payment of penalty
(u/s 43)
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