What is stamp paper India?
The stamp paper is a foolscap-size blank paper that’s printed with a revenue stamp like the one imprinted on currency notes or postal stamps. It is issued by the Government and usually carries a stamp paper value of Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs,500, Rs.1000, Rs.5000,Rs. 10000, Rs.15000, Rs.20000, Rs.25000 is final issued by Government.
Though every stamp paper carries a monetary value it can neither be treated as a negotiable instrument nor exchanged like currency notes. The document is used for endorsing authenticity to official agreements. Documents with legal implications, such as Lease Agreement, Buying and Selling of Property, Business / Contract Agreements, Loan Agreements / Financial Deals, Power of Attorney, Affidavits, Articles of Association, Memorandum of Association, Indemnity Bond, Declaration, Mortgage, and Gift Deed among others are executed on stamp papers to make them legitimate and legally enforceable.
Whether you are documenting a daily business transaction or executing an agreement for an upcoming project, using a Stamp Paper is a must. Whatever’s the modus operandi of an agreement, if you want to add legal sanction to it, a stamp paper should be used.
What is Stamp Paper? Know the Difference of Judicial & Non-Judicial Stamp Paper?
01. Judicial stamp papers
Generally, judicial stamp papers are used for legal purposes. For instance, it can be used for proceeding with court cases or continuing legal procedures. These stamp papers are also known as court fee stamp papers as they are often used to avoid cash transactions with the court. A case may not be admitted by the court without the payment of court fees. This makes judicial stamp paper important.
02. Non-judicial stamp papers
Non-judicial stamp papers are generally used for documents like Power of Attorney, sale deed, Rental Aggrement affidavits, transfer of immovable property like building or land, loan security, and mortgage or other important agreements.
The stamps are used as per the rates determined by the government for recovery of the stamp duty. At present, you can use a non-judicial stamp paper of value Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500, Rs.1000, Rs.5000, Rs.10000, Rs.15000, Rs.20000, or Rs.25000 for the documents mentions above.
Stamp Duty is the tax levied on the legal acknowledgment of documents. According to the law, it is mandatory to pay stamp duty to the Central/State Government when certain transactions take place. The value of stamp duty is either fixed or it may vary with the value of property/instrument under question. All states have different laws and prescribe the amount of stamp duty to be paid for a particular transaction which will vary from one state to another. In India, for instance, the Indian Stamp Act, 1899, is applicable for states, which do not have their own Stamp Act.
When paying the stamp duty, remember to research the required amount to be paid for a certain transaction. Avoid buying a non-judicial stamp paper or stamps or applying for franking or E-stamping without ascertaining the leviable dues, failing which you may overpay or pay less and remain liable for a penalty.