Revenue stamp only for receipt above Rs 5,000

Q. I solicit your expert advice on the levy of tax in the shape of a one-rupee revenue stamp. My queries are:

(i) Whether the stamp is required on receipt for Rs 500 also or it is only for amounts exceeding Rs 500 and upto which value?

(ii) Whether the stamp is required for amounts received only in cash or also for receipts through a cheque etc.

(iii) Some employers make payments of salary etc. to their employees through a payment advice to a bank for crediting the same to their respective bank account. Some employers get signatures (against a revenue stamp) of listed employees against their respective names for the amounts transferred to their bank accounts. Is stamp mandatory in such cases?

(iv) Banks do not insist on a revenue stamp on cash receipts or withdrawal payments, but they do in case of payments (in cash or even on credit to a saving bank account) on redemption of a fixed term deposit or bonds or Post Office saving instruments. Is it Ok in the latter case.

(v) Many a time signature is not done partly covering the stamp, but a stamp is fixed nearby and crossed simply. Is it Ok?

(vi) Is using a one-rupee revenue stamp a statutory obligation? What is the implication if the stamp is not used in a receipt?

A. The answers to your queries are as under:

(i) In view of the amendment of Schedule I, to the Indian Stamp Act 1899, the one-rupee stamp is required to be affixed on any receipt, the amount or value of which exceeds Rs 5,000. This amendment has come w.e.f. 10.09.04. The stamp is required to be affixed in respect of receipt which has been defined as under in Section 2(23) of the aforesaid Act:

“Receipt” include 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 acknowledgement, and whether the same is or is not signed with the name of any person.

(ii) In view of the above, the cheque received would also be covered for the affixation of the stamp.

(iii) The definition of receipt would definitely cover the cases referred to by you.

(iv) The withdrawals from bank account is not in the nature of receipt as defined herein above. However, the payment on a maturity of fixed deposit would definitely be covered.

(v) In my opinion, such receipt is not perfect.

(vi) The instrument which is not duly stamped is inadmissible as an evidence.

by S.C. Vasudeva
source:The tribune