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Karnataka Stamp Duty – Things You Must Know

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“You don’t pay taxes – they take taxes.” And as a rule, they essentially take Stamp Duties too! Your attitude to the same is not questioned, as it is imperative for anyone trying to procure legal documents to pay the Stamp Duty in return for the validity and authenticity the impression offers, including the knowledge that you are free from further obligations.  


What Is Stamp Duty?

As mentioned earlier, Stamp Duty refers to the tax paid to the government in order to follow the legal protocol which serves to provide security to documents, enough to make them recognizable/admissible in a court of law. Also, it is a flexible revenue instrument which can vary based on the context of documents it is used for – i.e, with the value of properties, products and services.

Once a document signed by the concerning parties has been accounted for through the payment of Stamp due on them, it is to be printed on a Stamp Paper. However, all documents do not mandate the usage of Stamp Paper as long as the holder of document pays the Duty (Rental Agreements belongs to one such category).

The Legislative Power to alter or levy a Stamp Duty is decided by both the State and Central Government. This classification can be understood by examining the Seventh Schedule of our Constitution which enlists the Central, State and Concurrent List. If the Central Government decides the Stamp Duty with respect to bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies, and receipts; State Legislature has the say in all the other documents except the ones mentioned above (some of which are mentioned below) There is, however, another protocol followed for documents like, succession of agricultural land, estate duty, taxes on goods transported through rail and air, inter-state trade/commerce, and taxes on sale and purchase of newspapers, including advertisements, where the Central Government decides the amount of Stamp Duty that is to be paid, but the State Government levies the same.

How Are Stamp Papers Classified?

Impressed Stamp Paper

Impressed Stamp Papers are those which have the proper Stamp affixed on them by an officer authorised to do the same. Otherwise, Stamps are either embossed, engraved or impressed by franking machines which is mostly carried out by banks after which the duty can be deposited.

Adhesive Stamp Paper

Adhesive Stamps are those which can be stuck on instruments.They are categorised into, Postal and Non-Postal Stamps. While Postal Stamps are used for the sole purpose of carrying out transaction with the post offices, Non Postal Stamps have varied usage. They are used as Court Fee Stamps, Revenue Stamps, Notarial Stamps, Insurance Policy Stamp, Foreign Bill Stamp, Broker’s Note Stamp and Share Transfer stamp.

E-Stamp Paper

With the revolution of the IT industry in Bangalore, e-Stamp Papers are the new innovation which provide the option of paying Stamp Duty online. Mostly prevalent in Bengaluru, it is used for Rental Agreements.

Ways To Pay Stamp Duty In Bengaluru, Karnataka

The most prevalent method of Stamp Duty payment in Karnataka is through Stamp Vendors. Vendors who are authorised to sell Stamp Papers collect the respective duty an instrument entails. Otherwise, one can pay the Stamp Duty at banks authorised to sell them.

However, there is always the threat of fraudulent Stamp Papers, especially those which possess value above Rs. 10,000. Department Of Stamps And Registration, the third highest revenue generating department of Karnataka, is tackling the menace of fake stamps through the innovation of e-Stamp Papers. However, it is also important for the general public to be equipped with the right knowledge to tell the difference between fake and real Stamp papers.

Remember the following points to tell the difference between Fake and Genuine Stamps –

  1. Impressed papers with lesser denominations are of homogenous colour and another unique character is the watermark (when held against shades of lightness/darkness, watermarks can be detected) of Ashoka Pillar and also the words ‘Satyameva Jayate’
  2. Stamp Papers with denomination from Rs. 1,000 to Rs. 5,000 have the following words imprinted, “India Non Judicial” visible on the printed part of the Stamp paper and also a watermark of the Ashoka Chakra.
  3. Higher denomination papers with value exceeding Rs. 10,000 are multicoloured and have serial numbers printed on them. Apart from the serial numbers, they also have watermarks of the Ashoka Chakra similar to the one found in the Stamp paper of Rs. 1,000 denomination. One can also identify a security thread on the left.
  4. The Special Adhesive Stamps of all denominations are printed with one colour. The word ‘Bharat’ is written in the Devanagari script and ‘India’ in English. These Stamp papers also carry citations of their respective purpose, like, Broker’ note, Share Transfer, Insurance, Notarial, Foreign Bills, etc.  
  5. Impressed Non-Judicial Stamp Papers are again marked with serial numbers.  

Some of the preventive measures to be undertaken in order to avoid falling victim to the sale of counterfeit Stamps is to always be sure to have purchased from licensed Stamp Paper vendors. Verify your purchase by evaluating their features against the ones mentioned above. Also make sure you have acquired the name, address, license and signature of the vendor on the Stamp Paper. Do not fall victim to discount or payback offers as such incentives have no provision under the Indian Stamp Act. Any and all persons are mandated to the Stamp Duties as maintained in the State’s schedule. If there is a provision for printing the document in question on a plane paper, it is prudent to the same and pay the Duty at the respectable bank through challans or DD to minimize the risk of buying fake Stamp papers.

If you should find counterfeit Stamps being circulated it’d be highly valuable for yourself and the general public if you brought it to notice of ‘Department of Stamps and Registration’ of Karnataka.

Does Your Document Elicit Stamp Duty Payment?

Here is a list of important document that prompts the payment of Stamp Duty –

  1. Transfer Of Property
  2. Affidavits
  3. Adoption Deed
  4. Loan Agreement
  5. Customs/Excise Bond
  6. Shares/Debentures
  7. Bills of Exchange
  8. Conveyance Deed
  9. Hire/Purchase
  10. Promissory Note
  11. Instruments on movable and immovable assets
  12. Partnership Deed
  13. Gift Deed
  14. Tenancy/Rental Agreement
  15. Agreement Of Sale
  16. Mortgage and Service Apartment
  17. Real Estate transactions

Online Stamp Duty Payment? With LegalDesk You Can! is one of the very few portals which provide the services of paying Stamp Duty Online. Browse through the multitudinous legal documents we help you create to find the one you’re looking for. What’s more, you can even suggest changes to the draft of your agreement apart from manually customizing by logging in to your account.  

Once you register with us, there should be nothing else stopping you unless your draft is ready. In that case, however, we can help you pay the Stamp Duty and procure the document printed on a Stamp Paper. Our Print and Delivery service will take care of the rest. To avail any documentation service by us, click this button below and place an order.

30 May, 16

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