Do e-signed agreements need stamp duty? E-stamping explained

Stamp duty is about the document, not the signature

Stamp duty is a tax on instruments, levied under the Indian Stamp Act, 1899 and each State’s own stamp law. Whether an agreement attracts duty, and how much, depends on what it is (an agreement, a lease, a bond, a security) and which State it is executed in. An electronic signature does not remove that liability.

An instrument that should have been stamped but was not can generally not be relied on as evidence until the duty and any penalty are paid. That is why it is worth getting it right before signing.

How e-stamping works

Most States allow e-stamping through the Stock Holding Corporation of India (SHCIL) or authorised collection centres and banks. You pay the duty online or at a centre and receive an e-stamp certificate with a unique identification number, which anyone can verify on the SHCIL website.

Combining e-stamping with e-signature

• Find the duty applicable to your instrument in your State’s schedule, or ask your advocate.
• Buy the e-stamp certificate in the name of the first party, with the correct article and amount.
• Scan or download the certificate and make it page 1 of your agreement PDF.
• Upload the combined PDF and send it for e-signature as usual.
• Keep the sealed PDF, certificate of completion and e-stamp number together.

Registration is a separate step

Some documents must also be registered with the Sub-Registrar. For example, leave and licence agreements in Maharashtra must be registered whatever their term (e-registration is available), and in many other States leases of 12 months or more need registration. Registration has its own process and is not replaced by e-signature.