The brave new world of e-stamping
It’s user-friendly, hassle-free, generates a unique ID number and helps you easily check the authenticity of the document
Stamp duty is a kind of tax which is required to be paid to the government. In transactions of immovable property, the amount of stamp duty payable is calculated on the market value of the property (as per the prevalent circle rates) or on the basis of the consideration amount of the property set out in the document, whichever is higher. Some important instruments pertaining to immovable property which require to be compulsorily stamped are agreement to sell, sale deed, lease deed, gift deed, partition deed, and settlement deed, to name a few.
In Delhi, physical stamp papers have been done away with and e-stamping facility has been introduced. Estamping is a computer based application and a secured way of paying stamp duty to the government. Earlier, e-stamping in Delhi was compulsory only for transactions where stamp duty was more than R500. Now the use of e- stamp papers has become mandatory for stamp duty of all denominations. Estamping facility is currently available in Gujarat, Karnataka, Maharashtra, Assam, Tamil Nadu, Rajasthan, Himachal Pradesh, to name a few.
To pay stamp duty, one can visit designated vendors. After submitting a duly filled and signed application form, the vendor will enter the details into the system and a stamp certificate would be generated immediately in case of payment by cash. In case the payment of stamp duty is made via any other mode (eg, cheque, demand draft/pay order/RTGS), the stamp certificate would be generated only after realisation of funds. Upon payment of the requisite stamp duty, a unique identification number is generated by the system which essentially acts as proof that stamp duty has been duly paid. If one wants to check the authenticity of the e-stamp of any transac- tion, he/she can simply enter the unique identification number on the official website of Stock Holding Corporation of India Limited to verify the same.
Stamp duty is required to be paid either before execution of the document or on the day of execution of the document. The Indian Stamp Act, 1899, clearly states that it is the buyer’s liability to pay stamp duty on sale transactions, unless the parties mutually agree otherwise. Adequate stamping and subsequent registration, wherever required, grants legal documents the status of being admissible in evidence in courts. Cases where courts have received an instrument that is not duly stamped or registered as evidence are few and far between.
Often, people erroneously assume that documents which do not require compulsory registration, also do not require compulsory stamping. There are certain documents which are required to be compulsorily stamped but may not require to be compulsorily registered. The consequences of non-payment and inadequate payment of stamp duty are harsh as it can lead to impounding of the document as well as attract a hefty penalty of upto ten times of the applicable stamp duty.
The shift to e-stamping has numerous benefits. Once an e-stamp is generated, then it cannot be modi- fied in any manner. Estamping can be done via secured electronic payment channels – hence malpractices such as fraudulent transactions and hoarding of stamp papers will be significantly curtailed. As each e-stamp paper carries a unique identification number, it is easier to check the authenticity of the e-stamp certificate. E-stamping is also quicker, more convenient and user friendly.