Stamp Duty Act

In order to legalize any document it is necessary to get it stamped but the government charges a duty on these stamps. The stamp duty act covers all the documents like mortgage deed, conveyance, lease, exchange, partition, sale deed, security bond and settlement bond so that the same can act as a documentary proof in the court of law during any discrepancy. The stamp duty converts the documents into a legal one and can easily be provided in the court. This stamp duty however might vary from state to state. It is expected to pay this duty in full or on time in order to avoid any penalty. The penalty of nonpayment of this duty might involve a fine or imprisonment. Any delay in the payment is subject to fine at the rate of 2% per month on the deficit amount of the duty with a maximum of 200%. This act saves you from all the frauds and provides you with complete peace of mind regarding the legality of all your documents.


The act however includes the nonpayment of duty on documents which are executed on behalf of the Government, testamentary documents, documents necessary for judicial or non-judicial proceedings and documents filed in judicial or non-judicial proceedings. According to the act all the documents which are executed in India need to be stamp duty paid. Such documents can also be admitted as evidence in the court in case of any legal proceedings. This duty is paid on the instrument and not on the transaction. The duty is charged on the basis of the contents of the instrument. This duty is paid either before the execution of the document or on the day of the execution of the document in full. The stamp duty on sale or purchase of land can equally be shared by the purchaser and the seller or as agreed upon by both the parties.


This duty can be paid in the form of stamp papers, using adhesive stamps or franking. The stamps should be purchased in the name of one of the executors of the instrument and no other person. If the instrument is executed on the stamps without bearing name of any one of the executors then it cannot be admitted as evidence in the court. Such instruments can be impounded and sent to the collector for recovery of the proper stamp duty. In case of sale or purchase of land or property the stamp duty is based on the ready reckoner rate of the property.


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