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.