Stamp Duty and Registration Clause: Meaning, Sample & Drafting Tips (India)
A stamp duty and registration clause allocates who pays stamp duty, who stamps and registers the contract, and what happens if it is under-stamped. In India this matters because an instrument not duly stamped is not admissible in evidence until the duty and penalty are paid, and certain documents must also be registered under the Registration Act, 1908.
Looking for the wider concept? Glossary: eStamping
How it works under Indian law
Stamp duty is levied under the Indian Stamp Act, 1899 and state stamp laws (for example the Maharashtra Stamp Act, 1958 and the Karnataka Stamp Act, 1957), each with its own schedule of rates. Instruments executed in India should be stamped before or at the time of execution. Under section 35 of the Indian Stamp Act, an instrument not duly stamped is not admissible in evidence for any purpose until the deficit duty and penalty are paid, and section 33 allows an authority to impound it.
Section 17 of the Registration Act, 1908 makes registration compulsory for certain documents — including non-testamentary instruments that create or transfer an interest in immovable property worth one hundred rupees or more, and leases for more than one year. Section 49 provides that an unregistered document that should have been registered does not affect the property, though it may be received as evidence of a contract in a suit for specific performance or for a collateral purpose.
States differ on how electronically executed contracts are stamped, and many offer e-stamping. Because the duty is set by the state where the document is executed (and sometimes where it is received), cross-state contracts need a deliberate decision about where and how stamping happens.
Drafting checklist
- Identify the state(s) of execution and likely enforcement, and the applicable stamp schedule entry.
- Decide who pays duty and who is responsible for stamping and any registration.
- Stamp before or at execution (use e-stamp paper or e-stamping where available).
- Check whether registration is compulsory (immovable property interests, long leases).
- Address differential duty if the document is acted upon in another state.
- Keep the original stamped instrument and e-stamp certificate safely.
Sample stamp duty and registration clause
Two versions: a standard position and an alternative you can offer in negotiation. Replace every [placeholder] before use.
Standard stamp duty clause
Standard positionThe stamp duty payable on this Agreement and on any document executed under it shall be borne by [Party A / the Parties equally]. [Party A] shall procure that this Agreement is duly stamped in accordance with the [applicable state] stamp law [before or at the time of execution / within the period permitted by law], and shall provide a copy of the stamped Agreement to [Party B]. If this Agreement is required to be stamped in any other State in India because it is brought into or acted upon in that State, the Party that needs to rely on it in that State shall pay any differential stamp duty, without prejudice to any agreed reimbursement. [If registration is required: The Parties shall present this Agreement for registration under the Registration Act, 1908 within the period prescribed by law and shall attend the office of the Sub-Registrar as required.]
Version with indemnity for deficit duty and penalty
Protects the party that did not handle stampingThe Party responsible for stamping under Clause [X] shall indemnify the other Party against any deficit stamp duty, penalty or interest levied on this Agreement as a result of its failure to stamp it duly and in time. If at any time either Party becomes aware that this Agreement is insufficiently stamped, it shall promptly notify the other, and the responsible Party shall pay the deficit duty and any penalty within [15] days so that this Agreement can be relied on in evidence.
Who pushes for what
Typical negotiating positions on each side of the table.
Party relying on the contract most
Prefers to control stamping to make sure it is done correctly and on time.
Other party
Wants duty shared or borne by the party that benefits most, and an indemnity for deficit duty.
Common middle ground
Duty borne by the party that customarily pays (e.g. buyer or lessee), with an indemnity for failure to stamp.
Common mistakes
- Signing on plain paper and planning to "stamp later" — penalties apply and admissibility is lost until cured.
- Using the wrong article of the stamp schedule, leading to under-stamping.
- Executing a long lease or property-related agreement without registration.
- Assuming electronically signed contracts never need stamp duty.
Frequently asked questions
Is an unstamped agreement valid in India?
An unstamped or under-stamped agreement is not void, but it is not admissible in evidence until the deficit duty and penalty are paid. The Supreme Court has also held that an arbitration clause in an unstamped agreement is not void for that reason.
Which documents must be registered?
Under section 17 of the Registration Act, 1908, documents such as instruments creating or transferring an interest in immovable property worth one hundred rupees or more, and leases of immovable property for more than one year, must be registered. Check state amendments as well.
Do e-signed contracts need stamp duty?
Stamp duty depends on the instrument and the state, not on how it is signed. Many states allow e-stamping, and the method for stamping electronically executed documents varies by state.
Who pays stamp duty on an agreement?
The stamp law sets a default for some instruments, but parties commonly agree who bears the cost. The clause should state it clearly and say who is responsible for getting the stamping done.
Related tools, formats and guides
Build a clause library with approved fallbacks in CaseDocker
Store your approved clause language and pre-agreed fallback positions in CaseDocker's Contract Management module, and use Playbooks to route any deviation to the right approver before the contract goes out for signature.