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In the world of finance and legal documentation in India, small details often carry big legal weight, and one such detail is the revenue stamp. Whether you are signing a rent receipt, acknowledging a loan repayment, or receiving cash above ₹5,000, affixing a revenue stamp can make a simple piece of paper legally binding. Despite being just a ₹1 adhesive, this stamp plays a crucial role in ensuring legal compliance and serving as proof of transaction.
What Is a Revenue Stamp?
A revenue stamp is a physical adhesive stamp that signifies the payment of government tax on financial transactions or legal documents. These are not the same as postal stamps used for mail. Revenue stamps serve the purpose of proving that stamp duty has been paid on a document.
In India, revenue stamps are widely used to authenticate certain documents and provide them with legal validity.
Common Uses of Revenue Stamps in India
Revenue stamps are used in various scenarios, especially in business and legal transactions:
- Cash Receipts: Mandatory on cash receipts above ₹5,000 to validate the transaction.
- Affidavits & Declarations: Often used in court-related documents.
- Agreements & Contracts: Used to authenticate simple contracts.
- Rent Receipts: Used in landlord-tenant agreements when monthly rent exceeds ₹5,000.
- Loan Repayment Acknowledgements: Used to validate repayments on paper.
- Insurance Claim Settlements: Acknowledgement of large sums may need a revenue stamp.
Legal Importance of Revenue Stamp
The Indian legal system recognises the use of revenue stamps as a method to ensure that a transaction or document is duly taxed and authenticated.
Here’s why it’s legally significant:
- Admissible in Court: A receipt with a revenue stamp can be presented as valid evidence.
- Stamp Act Compliance: As per the Indian Stamp Act, 1899, not affixing a stamp where required can lead to rejection of the document in legal matters.
- Proof of Payment: It acts as legal proof of payment or agreement when signed over a stamp.
Important Points to Remember
- Revenue stamps must be signed across by the payer to be valid.
- Only a ₹1 revenue stamp is legally available and used in India currently.
- Stamps are sold by authorised vendors and post offices.
- The stamp should be neatly affixed and not reused under any condition.
Difference Between Revenue Stamp and Stamp Paper
| Basis | Revenue Stamp | Stamp Paper |
| Purpose | Used on receipts and acknowledgements | Used for legal agreements and contracts |
| Denomination | Fixed at ₹1 | Varies (₹10 to ₹1000+) |
| Usage | For receipts above ₹5,000 | For legal contracts, affidavits, etc. |
| Format | Small adhesive stamp | Full-size legal paper |
| Affixed on | Documents like receipts | Drafts, agreements, affidavits |
Real-Life Examples from India
- Freelancers & Small Businesses: A ₹1 revenue stamp is used when issuing receipts for cash payments from clients over ₹5,000.
- Property Brokers: Use revenue stamps when taking or giving advance payments for property deals.
- Loan Settlements: Banks or NBFCs may ask for revenue-stamped receipts as proof of final settlement.
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Governing Laws and Regulations
- Indian Stamp Act, 1899: Governs the usage and rules of revenue stamps in India.
- Income Tax Act: In certain cases, revenue-stamped receipts help during tax assessments.
- Evidence Act, 1872: Stamped and signed documents are accepted as proof in legal cases.
How to Use a Revenue Stamp Correctly
- Buy from an Authorised Seller: Always purchase from a licensed vendor or post office.
- Affix on Receipt: Stick the stamp on the receipt or acknowledgement.
- Sign Across the Stamp: The receiver of the payment must sign on the stamp to validate it.
- Keep Record: Keep a copy for personal or business records.
- Do Not Reuse: Used stamps are not valid again.
ALSO READ – What Is Marginal Revenue? Definition, Importance & Use in Pricing
Key Takeaways
- A revenue stamp is a type of stamp used to collect government fees on financial documents.
- It is mandatory to validate transactions like loan agreements, rent receipts, and affidavits in India.
- A ₹1 revenue stamp is commonly affixed on cash receipts exceeding ₹5,000.
- It holds legal importance as it can be used as evidence in court.
Revenue stamps are governed by the Indian Stamp Act, 1899.
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Conclusion
A revenue stamp might look small, but its importance in legal and financial transactions in India is significant. Whether you’re a freelancer, landlord, business owner, or individual handling cash transactions above ₹5,000, using a revenue stamp ensures your receipt is legally valid and compliant with the law. Always use it properly to protect your rights and avoid legal complications.
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Frequently Asked Questions (FAQs)
₹1 is the only valid denomination currently in circulation.
No, revenue stamps are generally used for cash payments only.
You can purchase it from post offices or authorised stamp vendors.
Yes, if properly signed and used for appropriate transactions.
No, there is no expiry, but damaged or reused stamps are invalid.
No. For legal validation, only a single ₹1 stamp is required on eligible receipts.
No, once used and signed, it cannot be reused.
No, it’s typically used when the cash transaction exceeds ₹5,000.
No. E-stamping is used for higher-value legal documents, not receipts.
The receipt may not be accepted as valid evidence in court
