what will be stamp duty on customer contracts

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CS Jignesh Mistry (Querist)
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06 August 2009 dear friends,
could any one help me
1.what amount of stamp duty one should pay on customer contracts if contracts is more than Rs.1Lac p.a
if contracts is less than Rs.1Lac p.a
which law is applicable in Q.1 state stamp act or Indian stamp act,
which provisions explains the value of stamp paper to purchase in Q.1
2. of which state we should purchase stamp paper as per law ie Registered office of Co.(for ex: mumbai) or place of service (for ex.: delhi)and under which provisions.
of which act

thanx,

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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06 August 2009 I think State stamp act is liable if the matter in concern is local

CS Jignesh Mistry

CS Jignesh Mistry (Querist)
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07 August 2009 thanx for your reply sir, but can it be more problem specific

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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03 August 2025 Sure! Here’s a clear breakdown about stamp duty on customer contracts in India:

1. Which Stamp Act applies?
Stamp duty on contracts is governed by the State Stamp Act applicable to the place where the document is executed (signed).

The Indian Stamp Act, 1899 is a central legislation that acts as a guide but the actual stamp duty rates and rules are determined by each State’s Stamp Act.

2. Stamp Duty on Customer Contracts
The duty depends on the nature of the contract and state-specific laws. There is no uniform stamp duty fixed by the Indian Stamp Act for all contracts.

For commercial contracts (like customer contracts), usually the state Stamp Act prescribes a fixed amount or a percentage of the contract value as stamp duty.

Many states levy a fixed stamp duty or a small percentage of contract value if the contract value is above a certain threshold (e.g., ₹1 lakh).

If contract value is below ₹1 lakh, usually a nominal fixed stamp duty or sometimes even a ₹10 to ₹100 stamp paper may suffice.

3. Which State’s Stamp Paper to Use?
The stamp paper should be purchased as per the place of execution of the contract (i.e., where the contract is signed or agreed upon).

For example:

If contract signed in Mumbai → Use Maharashtra stamp paper.

If contract signed in Delhi → Use Delhi stamp paper.

This is because stamp duty is a state subject and duty is paid in the state where the contract is executed.

4. Provisions and Acts
The relevant state’s Stamp Act will have the schedule specifying stamp duty rates.

You can refer to:

State Stamp Act of the state where the contract is executed.

Indian Stamp Act, 1899 — Section 3 (Duty payable on instruments), Section 4 (Valuation of instruments) are guiding provisions.

Summary:
Question Answer
Stamp duty on contracts > ₹1 Lakh As per state Stamp Act rates (usually % of contract value or fixed fee)
Stamp duty on contracts < ₹1 Lakh Nominal fixed duty or fixed denomination stamp paper (₹10, ₹50, or ₹100 depending on state)
Applicable law State Stamp Act of place of execution
Stamp paper purchase State where contract is executed (place of signing)

Suggestion:
Check the stamp duty schedule of the specific state where contract will be signed.

If in doubt, consult local legal experts or commercial stamp vendors for correct stamp duty rates and papers.

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