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Prasad Yethadka (None)     13 November 2009

Amount of Revenue Stamp Needed for Promissory Note

Hi,

I am planning to lend substantial amount of money (few Lakhs Rupees) to a close relative for a short period (6 months). I understand that I need to get a Promissory Note from him. What is the amount (or %of loan) of Revenue stamps I need to affix? Does the borrower need to sign across each of the stamp (or just cross it)?

In case I don't find adequate Revenue Stamps (Because, In Karnataka, Revenue stamps are not sold any more and I am trying to get them from neighboring state) --  Is there any alternative to Revenue Stamps? If not, Is there any alternative option for me than the Promissory Note?

Thanks and regards,

Prasad

 



Learning

 6 Replies

advocate rajan pandurang joshi (Proprietor)     13 November 2009

A promissory Note is required to be stamped in terms of Indian Stamp Act (Article 49). Please check with the latest bare Act. However, I may submit that please ensure that the Promissory Note is not witnessed. Once it is witnessed, then it would be considered tobe a bond and would attract stamp duty in terms of local Stamp Act.

A V Vishal (Advocate)     13 November 2009

Section 2(2 3) of the Indian Stamp Act 1899 makes it mandatory for affixing of stamp on any receipt as defined therein above Rs 5000 .[Previously it was Rs 500]
  • 2(23) "Receipt" includes any note, memorandum or writing-
    (a) whereby any money, or any bill of exchange, cheque or promissory note is acknowledged to have been received, or
    (b) whereby any other movable property is acknowledged to have been received in satisfaction of a debt, or
    (c) whereby any debt or demand, or any part of a debt or demand, is acknowledged to have been satisfied or discharged, or
    (d) which signifies or imports any such acknowledgment;
    and whether the same is or is not signed with the name of any person "

PJANARDHANA REDDY (ADVOCATE & DIRECTOR)     13 November 2009

1.U CAN USE RS.1/- SIGNED WITH CROSSING AND WITHOUT CROSSING.

2.NO NEED OF ANY WITNESSES FOR PROMISORY NOTE.

3.TAKE 2 OR MORE SURETIES OF FINANCIAL (SOUND) PARTIES.

4.ALWAYS GIVE BY CROSS A/C  CHQS.

5.WRITE IT AS CLEARLY IT AS HAND LOAN FOR THE SPECIFIC TIME ON DEMAND.

6. PLEASE TRY TO SHOW SUCH MONEY IN TAXRETURNS OF THE CONCERN YEAR ASSMNT.

7. THE SOURCE OF INCOME MUST BE LEGAL.

8. CONSULT A LEGAL ADVISOR TO AOID ANY ANTI MONEY LAUNDERING PROVISIONS IN DEALING THE CASE.

9. FINALLY YOUR  RELATIVE MUST BE CAPABLE TO CONTRACT

1 Like

AnanadKumar (Advisor)     11 November 2011

i want to know, if the promissory note is not stamp, what is the consequence.

Is there is any caselaw in this matter. 

Sevarkodiyon Krishnasamy (Senior Executive)     06 January 2014

Dear Sir/Madam,

For House Rent Payments above Rs. 5000, affixing Revenue Stamp and sign across by landlord is mandatory to submit to IT filing?

Regards,
Sevarkodiyon Krishnasamy.

Akshay   30 November 2016

Dear Sevarkodiyon Krishnasamy.
Not required, actually you are not submitting any docs while filing IT returns, you are merely giving the details of the income assessed to tax.


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