Indian Stamp Act 1899: Key Sections Every Document Signer Should Know

The Indian Stamp Act, 1899 is the central law that decides which documents must carry stamp duty, who pays it and when, and what happens if a document is unstamped. Duty must be paid before or at the time a document is signed in India. An under-stamped document cannot be used as evidence until the shortfall and a penalty are paid.

Key facts

How the central Act and state stamp laws fit together

The Constitution splits stamp duty between the Centre and the states. Parliament fixes the rates for bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, transfers of shares and debentures, proxies and receipts (Entry 91, Union List). States fix the rates on every other document, including sale deeds, gift deeds, leases and affidavits (Entry 63, State List). The general law on stamp duty is on the Concurrent List (Entry 44).

So the rate you pay on a flat depends on your state. Maharashtra, Gujarat and Karnataka have their own stamp Acts. Delhi, Uttar Pradesh, Tamil Nadu and many others use the 1899 Act with their own amendments and schedules. States kept amending it in 2026, with Goa and Bihar each taking up amendment Bills. Our stamp duty by state page lists current rates.

A draft Indian Stamp Bill, 2023 was released by the Department of Revenue for public comment to replace the 1899 Act. It has not replaced the Act, which remains in force.

Section 3: which documents are chargeable

Section 3 charges duty on every instrument described in Schedule I that is executed in India. An instrument is any document that creates, transfers, limits, extends or records a right or liability. It also covers bills and notes drawn outside India and other documents signed abroad that relate to property or acts in India.

Three related rules matter in practice:

When duty is payable and how it is paid

Section 17 is the rule most people meet. Duty is due before or at the moment of signing. Stamp paper bought after the signing date does not satisfy it, which is why the stamp certificate date should not be later than the date on the document.

Section 10 says duty is paid through stamps, as the Act or state rules direct. Today that means one of these methods, depending on your state:

1. E-stamp certificate from Stock Holding Corporation of India (SHCIL) or an authorised centre.
2. Online payment through the state registration portal, such as Garvi in Gujarat.
3. Franking at an authorised bank, where the state still allows it.
4. Physical non-judicial stamp paper from a licensed vendor, where still sold.

Our guide to buying e-stamp paper online walks through the first method.

Sections 33 to 36: impounding and evidence

Under Section 33, anyone who has authority to receive evidence, and anyone in charge of a public office other than a police officer, must impound a document that is not duly stamped. That includes judges, arbitrators and sub-registrars.

Section 35 then bars the document. It cannot be admitted in evidence, acted on, registered or authenticated until it is stamped. For most documents the bar lifts once you pay the missing duty and a penalty of ₹5, or ten times the deficit if that is more. Receipts, bills of exchange and promissory notes are treated more strictly.

Once a court has admitted a document, Section 36 stops anyone from objecting later in the same case that it was not properly stamped.

On 13 December 2023, a seven-judge bench of the Supreme Court held that an unstamped or under-stamped agreement is not void. It is inadmissible in evidence until the defect is cured by paying duty and penalty. The case concerned arbitration clauses, but the reasoning on Section 35 is general.

Section 40: the Collector’s penalty

If a document is impounded and sent to the Collector, Section 40 lets the Collector demand the proper duty plus a penalty of ₹5 or up to ten times the deficit. The Collector can waive the penalty where a document was impounded only for breaking the one-stamp-per-document rules in Sections 13 and 14.

States have rewritten these penalties. Gujarat, for example, has charged a monthly penalty since its 2025 amendment: 2% of the deficit for each month if you come forward yourself, and 3% if the Collector finds it, capped at four and six times the deficit. Under Section 62 of the central Act, signing an unstamped chargeable document is also an offence punishable with a fine of up to ₹500.

Adjudication and refunds

If you are unsure how much duty a document needs, Section 31 lets you take it to the Collector, signed or unsigned, for a formal opinion on payment of a fee. Once the duty is paid, Section 32 lets the Collector endorse the document, and it is then treated as duly stamped. States set their own fee and time limits for this. Gujarat now charges ₹1,000 and requires a signed document to be brought within 60 days of signing.

Refunds come in three forms:

States have changed these limits too, so check your state’s rules before you apply.

Securities: the 2020 change

The Finance Act, 2019 amended the Act so that stamp duty on shares, bonds, mutual fund units and derivatives is collected at one place at uniform rates, from 1 July 2020. Stock exchanges collect it on exchange trades and depositories collect it on off-market transfers and new issues. The money goes to the state where the buyer lives. Delivery-based share purchases pay 0.015%. The full table is in our guide to stamp duty on share transfers.

These rules are general information. For a disputed or high-value document, a property lawyer can check the correct article and duty before you sign.

Frequently asked questions

Is stamp duty a central or state tax?

Both. Parliament sets rates for a short list of documents, such as cheques, share transfers and insurance policies. States set rates for everything else, including property documents.

When is stamp duty payable on an agreement?

Before or at the time of signing, under Section 17. A document signed outside India can be stamped within three months of reaching India.

Is an unstamped agreement void?

No. The Supreme Court held in December 2023 that it is valid but cannot be used as evidence until duty and penalty are paid.

Who pays stamp duty on a sale deed?

The buyer, under Section 29, unless the parties agree otherwise. On an exchange of property, both sides pay equal shares.

What is the penalty for insufficient stamp duty?

Under the central Act, the deficit plus a penalty of up to ten times the deficit. Several states have replaced this with a monthly penalty with a cap.

Can I get a refund for stamp paper I did not use?

Yes, if the Collector is satisfied. Under the central Act, unused stamps bought within the last six months are refunded less 10 paise per rupee.

Sources

• Indian Stamp Act, 1899 (text) — Inspector General of Registration, Maharashtra (checked 16 Sep 2026)
• FAQs on Indian Stamp Act amendments and rules — SEBI (checked 16 Sep 2026)
• Judgment of 13 December 2023 on unstamped arbitration agreements, 2023 INSC 1066 — Supreme Court of India (checked 16 Sep 2026)
• Summary of the unstamped arbitration agreement judgment — Supreme Court Observer (checked 16 Sep 2026)
• Constitution of India, Seventh Schedule — Legislative Department (checked 16 Sep 2026)
• Gujarat Stamp (Amendment) Act, 2025 — Gujarat Government Gazette (checked 16 Sep 2026)
• Indian Stamp (Goa Amendment) Bill, 2026 — PRS Legislative Research (checked 16 Sep 2026)
• Finance Ministry’s draft Indian Stamp Bill — Vinod Kothari Consultants (checked 16 Sep 2026)