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Why stamp paper

Dear ALL

as per general law , any understanding entered between two parties & signed - even on a piece of paper consititutes a valid agreement , unless the contents of the understanding is illegal.

If so then why Stamp papers are required - except it serves the purpose of revenue to Govt


 2 Replies

Niraj Kumar (Corporate lawyer)     08 September 2011

Non payment Stamp duty in no way affacts the validity of the agreement/understanding. Even if agreement is entered into a plane paper is valid. Stamp duty is paid over the document and not the transactions. Payment of stamp duty only provides some additional recognition mainly for evidence pupose and off course a mode of revenue generation. 

S.Khan (Advocate)     16 September 2011

stamp duty is a tax imposed by the state governmet so the duty varies from state to state. If the particular agreement/understaning requires the proper stamp duty it  must  be duly stamped. If it is unstamped it shall not be admissible in evidence in the court u/s 35 of the Indian Stamp Act. 

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