Revenue Stamp
This query is : Resolved
01 May 2009
As per Indian Stamp Act, 1899 Revenue Stamp to be affixed is mandatory in nature u/s 2(23) of the Act, on receipt of above Rs. 5000/-. please let me know the consequences of it, If the law is not followed.
01 May 2009
Expense can be disallowed and further it cannot be possible for you to prove if the payee denied of the payment made.
07 May 2009
Please explain under which section/clause expenses can be disallowed.
08 May 2009
Please explain under which section /clause expenses can be disallowed if revenue stamp is not affixed on receipt as defined u/s 2(23) of indian stamp act, 1899
22 July 2025
This is a very good question because it touches on a legal compliance point that is often misunderstood. Let’s clarify it properly:
🔍 Context
As per Section 2(23) of the Indian Stamp Act, 1899, a “receipt” includes any document that acknowledges the receipt of money or goods.
As per Schedule I of the Act, a Revenue Stamp of ₹1 is required to be affixed on receipts for amounts exceeding ₹5,000 in cash or bearer form.
📌 Important Clarification
❓ Does non-affixation of revenue stamp make the payment invalid?
NO. The payment is still legally valid.
But...
❌ What are the consequences if revenue stamp is not affixed?
Receipt becomes inadmissible as evidence in court
As per Section 35 of the Indian Stamp Act, any instrument chargeable with duty but not duly stamped is not admissible in evidence in any civil proceedings.
So, if the recipient denies receiving the money, and the receipt doesn’t carry a revenue stamp, the payer cannot use that receipt in court unless stamp duty and penalty are paid.
No direct disallowance of expense under Income Tax Act
There is no specific section in the Income Tax Act (like Section 40 or 37) that disallows an expense just because revenue stamp is missing.
However, in case of dispute or scrutiny, the burden of proof may be on the assessee to establish that the payment was made.
🔍 Context
As per Section 2(23) of the Indian Stamp Act, 1899, a “receipt” includes any document that acknowledges the receipt of money or goods.
As per Schedule I of the Act, a Revenue Stamp of ₹1 is required to be affixed on receipts for amounts exceeding ₹5,000 in cash or bearer form.
📌 Important Clarification
❓ Does non-affixation of revenue stamp make the payment invalid?
NO. The payment is still legally valid.
But...
❌ What are the consequences if revenue stamp is not affixed?
Receipt becomes inadmissible as evidence in court
As per Section 35 of the Indian Stamp Act, any instrument chargeable with duty but not duly stamped is not admissible in evidence in any civil proceedings.
So, if the recipient denies receiving the money, and the receipt doesn’t carry a revenue stamp, the payer cannot use that receipt in court unless stamp duty and penalty are paid.
No direct disallowance of expense under Income Tax Act
There is no specific section in the Income Tax Act (like Section 40 or 37) that disallows an expense just because revenue stamp is missing.
However, in case of dispute or scrutiny, the burden of proof may be on the assessee to establish that the payment was made.
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