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The stamp paper is a foolscap size paper having printed revenue stamp of specific value such as Rs.10, Rs.20,Rs. 50,Rs.100,Rs.500 etc. by Govt. Generally, all important transactions like buying, selling or renting of any property shall be done on stamp paper.
The stamp papers also are a source of revenue for Government.
The stamp paper is also used for giving power of attorney or doing any type of agreements containing financial deals, contracts, affidavits, declaration.
In any country, important documentation is only valid if done on a required value of stamp paper as prescribed by state law.
Now a days one can purchase stamp paper from stamp vendors or one can use E stamp paper. E-stamping is a computer based application and it is considered a more secured way of paying non-judicial stamp duty to the government. The prevailing physical stamp paper can be replaced by E-stamping. The E-stamping bears unique Identification Number too.
For each contract document or legal document you are obliged to use a particular value of a stamp. The law specifies the different value of stamp paper to be used for different types of documents, otherwise, the document may not remain enforceable and either it may become invalid or you might have to pay penalty under the stamp act.
There are two types of stamp papers used:
01. Judicial stamp paper
02. Non-judicial stamp paper
Judicial stamp paper:
Judicial stamp papers are generally used for a legal purpose or for court cases. The Judicial stamp papers are also commonly known as court fee stamp paper. The judicial stamp papers are used for payment of court fee in the court to avoid cash transactions. The case may not be admitted without payment of court fees.
Non-judicial stamp paper:
Non-judicial stamp papers are generally used for documentation like power of attorney, sale deed, rent agreement, affidavits, transfer of immovable property like building, land, mortgage or other important agreements etc.
At present the non-judicial stamp papers of value Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10000, Rs. 15000, Rs. 20000 and Rs. 25000 are available.
It is advisable to purchase stamp papers from Govt. approved legal stamp vendors.
Thus it is mandatory to use stamp paper for creating enforceable documents and that too, you have to use stamps of specified value as prescribed in the stamp act.