Types of stamps and stamping methods
Indian Stamp Act,1899, a revenue legislation governs the stamping of documents and instruments. The Act also stipulates the instruments that are chargeable with stamp duty. The governing norm regarding stamp duty is that all instruments liable for stamp duty must be stamped before or at the time of execution. There are certain exceptions too. Different stamping methods are adopted for payment of stamp duty. In the state of Maharashtra, the State Stamp Act permits stamping of documents on the immediate next day of execution of documents. Though stamping is to be done prior to execution of document, in certain cases, shortage / non-stamping can be rectified by payment of stamp duty and penalty.
Paying stamp duty is an integral part of transaction carried out in India. Purchase or sale of property, leasing of property, registering an insurance policy, setting up of a business etc involves payment of stamp duty. Awareness on different types of stamps and stamping methods are essential in today’s world.
What are the stamping methods to pay stamp duty?
There are different stamping methods through which stamp duty can be paid. They are
1. Stamps (Revenue stamp and special adhesive stamp)
2. Papers bearing impressed stamps (Non-judicial stamp paper)
3. E-stamping
4. Franking
1 .What are the stamps used to pay taxes/ fees?
A. Revenue Stamp
A revenue stamp is an adhesive stamp, used to collect taxes. India is a heavy user of revenue stamps. It can be considered as a receipt issued by the government confirming payment of tax/ fee. The receipt of an amount above the specified threshold shall be acknowledged by the receiver by affixing a revenue stamp of Rs. 1.00. As per Indian Stamp Act, 1899 receipt of above Rs. 5000 should be acknowledged by the receiver by affixing revenue stamp. Demand Promissory Notes and receipts should be affixed with Revenue stamps.
B. Special Adhesive Stamps
Special Adhesive Stamps are used only for certain specified documents. These kinds of stamps contain an inscription on the face of the stamp that specifies the purpose for which it should be used. Special Adhesive Stamps cannot ordinarily be used for payment of stamp duty for purposes other than as prescribed on the face of special adhesive stamp.
Special adhesive stamps are commonly used for insurance, notarial, share transfer etc and contain such inscription on the face of the stamp. If the State Stamp Act specifically permits usage of Special Adhesive stamps for other purposes, then these stamps can be used for said purposes also. In certain states debt acknowledgement, balance confirmation etc are permitted with Special adhesive Stamps. These stamps shall be cancelled by proper officer authorized by Stamp Act. For Example, in the State of Kerala, Managers of Scheduled Commercial Banks are also authorized proper officers. Additionally, the state has permitted usage of Special Adhesive Stamps in lieu of stamp paper.
2. What is a Non -Judicial Stamp Paper?
Non-Juducial Stamp papers are stamp papers used for execution of documents. Title deeds, lease agreement, agreements with banks, power of attorney etc are executed in non-judicial stamp papers. Indian Stamp Act 1899 governs payment of stamp duty via non-judicial stamp paper.
What are the differences between Judicial Stamp Paper and Non-Judicial Stamp Paper?
Judicial Stamp Paper is also known as Court Fee Stamp paper. They are used in courts for effecting payment of court fee. Judicial stamp papers are used in relation to administration of justice and judicial processes. When a civil complaint is filed by a person or a bank, judicial stamp paper of value in proportion to the claim has to be used. Court Fee Act 1870 covers payment of court fee.
3. What is e-Stamping method?
E-stamping is a popular stamping method used for paying stamping document that is otherwise carried out by purchasing non-judicial stamp paper. It is a computer based application. The customer has to fill up an application (mainly online) for e-stamping of documents and the amount can be paid by way of demand draft, NEFT/RTGS or cash. E-stamping permits verification of authenticity and hence is very popular, safe and efficient way of payment of stamp duty. E-stampings are permitted by Stamp Act applicable to the relevant state and are normally allowed only over certain minimum limit.
E-stamping method is extended by different states in association with the Stock Holding Corporation of India Ltd, which is the authorized agency for carrying out this stamping method.
4. What is Franking?
Franking is also an alternative stamping method of paying stamp duty where non-judicial stamp papers are to be employed. In this stamping method, a franking machine is used to imprint stamp on the document itself, on payment of the stamp duty. Franking machines are deployed in various Sub-Registrar Offices/ Treasury/designated branches of Public Sector Banks with facility for remittance of stamp duty and franking. The prepared document must be presented for franking before execution. Stamp Duty and Stamping of Documents
