In this post, we have sought to compile some of the common questions that arise in the minds of corporates and other individuals who commonly enter into e-contracts, inter-state contracts and /or  international contracts. We trust our readers will find this useful.

  1. When is stamp duty to be paid?

Under the laws of India1, a document which is executed in India is chargeable with stamp duty on or before the time of execution.

Execution of the document essentially means the signing of the document2. When a document is of such character that two parties need to sign it, in such a case the document is said to be executed when both the parties have put their signature on the document3.

In Maharashtra, the Maharashtra Stamp Act, 1958 is applicable to all the documents executed or brought in the state for the purpose of chargeability of the stamp duties. All the instruments chargeable with duty and executed by any person in this state are required to be stamped before or at the time of execution or immediately thereafter or on the next working day following the day of execution.4

  1. How much stamp duty is to be made on an instrument?

Schedule 1 to Maharashtra Stamp Act, 1958 lists down the rates of stamp duty chargeable on a particular instrument that is executed in the given state.

It should be noted here that if one instrument envisages multiple transactions or incorporates several distinct matters, the stamp duty chargeable to such instrument would be the aggregate amount of the stamp duty that each transaction/matter would be separately charged with under the said Act5.

Also in case of inter-state transactions where the stamp duty levied by the first state is lower than the stamp duty levied by the second state, a differential stamp duty shall be required to be paid when the document is brought into the second state6. Hence, it is recommended the one identifies the higher stamp duty that can be levied out of the stamp duty rates provided by both the states and consequently stamps the document with such a higher stamp duty rate.

  1. What are the different modes of paying stamp duty?

According to the Maharashtra Stamp Act, 1958, stamp duty shall be paid vide impressed stamps or adhesive stamps7. Hence the stamp duty on any instrument (including an electronic document) may be paid via adhesive stamps, non-judicial stamp paper, franking machines, labels being affixed and impressed by proper officer or receipt of e-payment of the stamp duty8.

  1. When can a Non Judicial Stamp Paper be used?

Except in certain specific cases, a non-judicial stamp paper can be used for payment of stamp duty in Maharashtra9. Enclosed herein is Schedule I of the Maharashtra Stamp Act, 1958 stating the stamp duty chargeable on the document as well as the type of stamp that can be used to pay the stamp duty.

  1. When can franking be done?

Franking is included in the meaning of impressed stamps under the Maharashtra Stamp Act, 195810. Every document on which stamp duty is permissible by way of impressed stamps may be stamped by way of a franking machine. The procedure for stamping the document through franking is stated below:

  1. An application is submitted to a franking agency or an authorized bank.
  2. The document for which stamp duty is to be paid is printed on plain paper (before the execution of the instrument) and a stamp is affixed on the paper indicating the value of the stamp duty paid.

It is also to be noted that the Maharashtra Government has prescribed a maximum limit for the payment of stamp duty by way of franking machines on a single document to Rs. 5000 or of documents only for amounts upto Rs. 500011.

  1. How is stamp duty to be paid on the electronic document?

E-payment of stamp duty can be done through:

  1. Online payment into the Virtual Treasury through Government Revenue and Accounting System(GRAS)12; or
  2. Electronic Secured Bank and Treasury Receipt (e-SBTR) issued by authorised banks13.

Both the abovementioned payment options can be availed on

The simple receipt or challan generated after the payment of the appropriate amount of the stamp duty leviable on the document containing the Challan Identification Number (CIN) in case of e-SBTR option and Government Reference Number (GRN) in case of GRAS option shall be treated as a valid proof of payment of stamp duty14.


1 Section 17 of the Indian Stamp Act, 1899

2 Section 2 (12) of the Indian Stamp Act, 1899

3 Page 80 of The Indian Stamp Act by K.Krishnamurthy.

4 Section 17, The Maharashtra Stamp Act, 1958

5 Section 5 of the Maharashtra Stamp Act, 1958

6 Section 7, The Maharashtra Stamp Act, 1958

7 Rule 2 of the Bombay Stamp Rules, 1939

8 Section 2(k) of the Maharashtra Stamp Act, 1958

9 Rule 6 of the Bombay Stamp Rules, 1939

10 Section 2(k) of the Maharashtra Stamp Act, 1958

11 Vide Order No. D-/STP/CASE NO/6/14/106/2014 dated March 15, 2014

12 Rule 3 of the Maharashtra e-Payment of Stamp Duty and Refund Rules, 2013

13 Rule 5 of the Maharashtra e-Payment of Stamp Duty and Refund Rules, 2013

14 Rule 4(c) of the Maharashtra e-Payment of Stamp Duty and Refund Rules, 2013

Originally Published 17 December 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.