The Constitution of India has provided provisions for levying taxes. Tax is levied in the form of stamps on instruments recording the transactions. This form of taxation has been found to be convenient for collection and supervision. The stamp Act is Fiscal statue dealing with tax on transactions. Article 246 and the 7th schedule are relevant in regard to the legislative power to levy stamp duties. Article 265,268 and 269(e) are relevant mainly as regards the distribution of revenue. The proceeds of stamp duty levyable in any financial year shall we assigned to the state. Under Article 246 such stamp duties as are mentioned in a list are levied by the Union, but under Article 268 the state in which they are levied collects and retains the proceeds. As the revenue from stamp duty is assigned to the state in which they are collected each State Government has prescribed by rule that stamps purchased in the state alone should be used for instruments executed in it.
Tax is levied in the form of stamp in respect of transactions in instruments like Bill of exchange, letter of credit, Debenture, policy of insurance, Agreement or memorandum of Agreement, lease cum sale, sale of property, deposit of deeds, conveyance etc as defined in schedule 2 of Stamp Act. As provided in the Stamp Act all duties with which any instruments are chargeable shall be paid and such payment shall be indicated on such instrument by means of impressed stamps or stamps issued by the Government An instrument to be duly stamped should be stamped with a stamp not only of the amount required by law but also in the manner prescribed by law.
The stamp duty payable on an instrument may also be paid in cash by Challan in banking treasury or treasury countersigned by an officer empowered by a State Government or by Demand draft or by pay order drawn on branch of any scheduled bank.
The instruments may be stamped with Adhesive stamp. There shall be two kinds of stamp for indicating the payment of duty.
Impressed stamps includes
a) Labels affixed and impressed by the proper officer
b) Stamps embossed or engraved on stamped paper
c) Impressions by franking machines.
Special adhesive Stamps are labels.
All Stamps shall be purchased only from any of the State Treasuries / Sub Treasuries / from a person / local bodies who has been granted a licence under the Karnataka Stamps Rules, 1958. Franking or impressing of stamps may be allowed upto to any amount.
The stamp as a history of more than 150 years. The concept of registration of property is older and got special evidentiary value in law. The stamps are generally categorized as Postal stamps and Non-Postal stamps. Postal stamps are used for transaction with post offices and related functions. The following types of stamps come under Non-Postal stamp category.
Court fee stamps
Non-Judicial stamp papers
Special Adhesive stamps (Labels)
Foreign Bill stamps
Insurance policy stamps
Share Transfer stamps
Insurance Agency stamps
Non judicial stamp papers of denominations up to Rs. 500/- are printed at Security Printing Press Hyderabad. Non-judicial stamps of denomination Rs 1000/- and above (up to Rs.25000/-) are printed at India Security Press, Nasik. All types of Adhesive stamps, Revenue stamps, Judicial stamps are printed at I.S.P Nasik. Government of India has established security press at Nasik and Hyderabad to cater the needs of various states of the country in respect of security documents and stamps of different denominations. Security press is also entrusted with the task of designing and developing the security documents. The Security press is headed by an officer of the rank of General Manager and functions under the control of Finance Ministry, Government Of India.
The features of each of the different stamps are enumerated bellow
1) Revenue stamps:
Revenue stamps are widely used by all section of the society especially involving payment of money.
Denomination: Re.0.25, 0.50, 1.00
Usage: Receipt of payment of Money
2) Court fee stamps:
Court fee stamps are generally used by public and other departments for correspondence with Government departments, such as RTO, Police, Revenue offices, etc.,
Usage: Stamp Duty payment in respect of Transaction through Brokers
vi) Notarial Stamp
Denomination: Re.0.50, 1, Rs.2, 5.
Usage: Used by Notary
Letters are printed in Black on overprinting of all these stamps. If the watermark is genuine in a stamp paper, by placing a genuine stamp paper on a tracing paper and rubbing with a crayon, one can obtain the replica of the watermark on the tracing paper.
These Adhesive stamps (Fiscal stamps) are generally used by the insurance companies, commercial Banks, Financial institution, corporate offices, Business Houses, Registered companies etc. all over the country and have common acceptability.
EMBOSSING OF STAMP DUTY :
This is one among the several forms of payment of stamp duty which is done exclusively in the Office of the Deputy Director, Stamp Depot, Vidhana Soudha, Bangalore. Any person desiring to get the document ofemboss will make an application indicating the amount of stamp duty to be embossed. A challen is countersigned for the required amount, which will be remitted to the Reserve Bank of India and returned to the Treasury. The payment will be reconciled or the payment scroll will be obtained from the Reserve Bank next day. And the document is transmitted to the Government Printing Press, Peenya, where the embossing machine is located. The stamp duty will be embossed on the first sheet of the document and return to the Deputy Director of Stamps, who will attest the embossed impression and also affix a counter embossing seal. The document will then is returned to the applicant.
FRANKING : This is one of the several methods of indicating the payment of stamp duty. Franking machines are installed in some Sub-Registrar office in the State. These machines frank upto a denomination of 999 rupees. An application indicating the amount of duty to be frank is made to the proper officer authorize under the rules along with the unexecuted typed or printed documents. The necessary amount is paid in cash to the proper officer and the required denomination is franked on the document and return to the applicant.