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The document discusses the Indian Stamp Act of 1899 which was enacted by the British government as a revenue generation mechanism. The Act imposes stamp duty on certain documents to make them legally valid. The duties include impressed stamps and adhesive stamps. Key terms discussed are conveyance, duly stamped, instrument, and instruments chargeable with duty.

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10 views2 pages

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The document discusses the Indian Stamp Act of 1899 which was enacted by the British government as a revenue generation mechanism. The Act imposes stamp duty on certain documents to make them legally valid. The duties include impressed stamps and adhesive stamps. Key terms discussed are conveyance, duly stamped, instrument, and instruments chargeable with duty.

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sapnagoyal882
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© © All Rights Reserved
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Overview

Indian Stamp Act was amended in 1899 by the British Government with the
sole purpose of acting as a revenue-generating mechanism for the Government.
This Act imposes liability to pay stamp duty on certain and specific documents.
Indian Stamp Act acts as fiscal legislation.

Objectives of the Stamp Act, 1899


1. The main purpose of this Act is to generate revenue for the Indian
government.
2. A document which is stamped acts as valid evidence in a court of law.
3. The Stamp Act also makes payment of stamp duty on some documents
compulsory which in return makes those documents legally valid and
authentic.

Stamp Duty
The tax payable on a certain and specific document is termed as stamp duty.
Stamp duty can be fixed or varied based on the value of the product.

Basically, stamp duty is a tax which is paid on the exchange of documents or


execution of instruments.

There are basically two kinds of stamp duty and they are:

1. Impressed stamp- An impressed stamp is produced by the process of


engraving or embossing. The labels in impressed stamps are affixed
and these impressions are done by franking machines in the bank.
2. Adhesive stamp- Adhesive stamps are those stamps which can be
stuck to a document using any form of adhesive. There are two types
of adhesive stamps and they are:

a. Postal stamps- Postal stamps have their limited application. Postal


stamps are used for post office related transactions.
b. Non-postal stamps- Non-postal stamps have wider application
compared to postal stamps. Non-postal stamps are revenue stamp,
court fee stamp, insurance policy stamp etc.
There are certain very important terms that are related to The Indian Stamp
Act, 1899. It is important for us to be aware of those terms and they are:

o Conveyance- Section 2 (10) of the Act defines the term
conveyance. It basically includes an instrument by which
property is transferred. It applies to both movable and
immovable property. Sale deed, transfer of lease, release,
settlement are all chargeable as conveyance.
o Duly Stamped- Section 2 (11) defines this term. It means that
the instrument bears the adhesive or impressed stamp, not
below the amount essential by law and further no violation to
the manner prescribed by law. The amount of stamp to be
used is governed by provisions and schedule to the Stamp
Act. The manner of stamping is governed by section 10 to 19
of the Act and also by the rules framed by the Government.
Under this head are included particulars as to the description
of state ps and the number of stamps to be used. Thus an
instrument which is to be written on paper with an impressed
stamp is not duly stamped if it bears only an adhesive stamp
of the value and vice- versa.
o Instrument- Section 2(14) defines the term instrument. So
instrument means any document through which any right,
liability is created, transferred, extended or extinguished. A
document which helps to record such rights and liability even
though the document itself does not create such right or
liability can also be termed as an Instrument.
o Instrument chargeable with duty- All the instruments
mentioned in the schedule are chargeable with duty of
amount as mentioned in the Act. The exception to charges is
an instrument which is executed by the government or
executed for the purpose of Special Economic Zone.

Valuation of Instrument for levy of stamp duty


As we already know that Instruments are chargeable with duty but then it
raises another question and that is how is the valuation of instruments is done,
the answer to that question is from Section 20 to Section 27 excluding Section
22 of The Indian Stamp Act.

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