Blog Article

Did you just realize that your legal document is one step short from turning into an instrument? A document essentially becomes an instrument, as prescribed by the Indian Stamp Act, 1899, if one has paid the Stamp Duty.

Stamp Duty is indeed more crucial than the registration of documents. Unlike the absence of registration of certain documents, absence of Stamp Duty payment can attract penalty or worse, imprisonment. If this isn’t alarming enough, you should also note that documents not adhering to the protocol set by the government are inadmissible as evidence in courts. If anything they can act as supporting evidence when the burden of proof rests on you as a defendant.

Stacked against all these odds, ignoring something as important as Stamp Duty can be foolish both personally as well as economically, as it is also an efficient revenue instrument for the State Governments.  

Understanding Stamp Duty

Stamp Duty is an instrument of revenue exercised by both the Central and State Governments for regulating documents on transfer of property/asset, affidavits and other documents which require legal validation.

Stamp Duty is, hence, a type of tax levied by the government both in fixed and varied rates, based on the value of the instrument, service or property (depending on the type of the document). Hence, in a transaction, the tax paid can be accounted to the consideration paid in return for the legal validation it offers.

Also worth remembering is that, without the payment of Stamp Duty, a document (these documents find a mention below) is just a sheet of paper whose words within carry no consequences legally or financially. Otherwise, if you have followed the protocol set by your respective, in this case Telangana, your document turns to an instrument.

Why And How To Pay Stamp Duty?

Importance of payment of Stamp Duty is paramount when viewed against the amount of risk you’ll be exposed to otherwise. When an agreement or contract runs into a legal battle, both civil and criminal courts doesn’t accept documents which haven’t paid the stipulated Stamp Duty.

Stamp Duties can be paid from the following ways as prescribed by the Indian Stamp Act, 1899 –

1. Impressed Stamp papers can be purchased from the authorised Stamp Vendors with the license to sell the same.
2. Impressed Stamps can be procured from the nearest Registrar or Sub-Registrar Offices.
3. Stamp Duty can be paid to the Government through banks with the provision to accept Duties, either through challans or DD. The challan system was introduced by the Andhra Pradesh Government with the intention of avoiding the sale of counterfeit Stamps and also to regulate the sale of Stamp Papers through vendors with no authority or license. Therefore, if one opts to pay the Stamp Duty either to a nationalised or scheduled bank, the necessity of purchasing the Stamp Paper can be avoided.

Know The Legality Behind Stamp Duties

Here are a list of points one ought to remember before proceeding to purchase Stamp Papers –

1. Validity of Stamp Papers – A Stamp Paper doesn’t carry an expiration date and is hence, valid for an entire lifetime, once purchased.
2. Usage of Adhesive Stamps – Adhesive Stamps are those which can be affixed by an officer authorised to do the same. It is used for documents like, Bill of exchange, Promissory Notes made out of India, entry as an advocate to a high court, Notarial Acts, and Transfers by Endorsements of Shares in any Incorporated Company.
3. Usage of Impressed Stamps – Impressed Stamps are mostly used for conveyance or those instruments concerning property transfers. The Stamp Duty for the same is fixed by their respective State Legislation.
4. Usage of Postal Stamp Papers – Postal Stamp papers which have the Stamps affixed on them are used for Postal Transactions.  
5. Only one Instrument can be executed on a Stamp Paper.
6. Instruments executed through Impressed Stamp Papers shouldn’t have characters printed on the Stamp.
7. Stamp Duty has to be paid before or during the execution of the Document.
8. The liability of paying the Stamp Duty will fall on that party depending on the instrument being executed –
   1. For a Lease Agreement – Lessee i.e., the Tenant is liable to pay the Stamp Duty.
   2. For a Conveyance/Sale Deed – the purchaser is liable to pay the Stamp Duty.
   3. For a Power of Attorney – Party executing the POA must pay the Stamp Duty.
   4. For an Exchange Deed – both parties equally are to pay the Stamp Duty.
   5. For a Partition Deed – all the parties are liable to share the Stamp Duty.

Does Your Document Require The Payment Of Stamp Duty?

If you are here trying to find the amount of Stamp Duty required to pay for Rental Agreements, you can use LegalDesk’ Stamp Duty calculator to find out both Stamp Duty and registration charges by entering the monthly Rent and Security Deposit that you have agreed upon.

Other Documents that mandates one to pay Stamp Duty are as follows –

Other documents that elicits Stamp Duty payment are, Appointment in execution of Power, Hire/Purchase, Increase in authorised capital, Agreement for Sale, Home Loan, Loan Agreement, real estate transaction including buying, selling, renting or leasing or immovable, residential or commercial property, postal transactions, documents pertaining to court, etc.

Stamp Duty Online? With LegalDesk You Can!

Apart from the traditional methods of paying Stamp Duty, you can choose the easier alternative offered by LegalDesk.com. Through our portal one can pay the Stamp Duty online through the purchase of Stamp Papers and have the same delivered to your doorstep. Our Print and Delivery service, though at the moment doesn’t cover all parts of Telangana, we are working towards covering all the cities in both Telangana and Andhra Pradesh.