When Is A Revenue Stamp Required On A Rent Receipt?
When should a revenue stamp be placed on a rent receipt and why is it necessary? Rent receipts must be given to employers as verification of rent payment if employees intend to claim tax deductions on the portion of their salary that is allocated to housing allowance. According to the terms of the Indian Stamps Act, 1899, you must apply revenue stamps to rent receipts at the time of submission in order for them to be legally recognised.
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However, depending on how much you pay your landlord each month, a revenue stamp might or might not be required. This article will explain the legal ramifications of the revenue stamp on the rent receipt and whether or not it is required of the renter.
What is a revenue stamp?
The Indian Stamp Act of 1899 defines a “stamp” as any mark, seal, or endorsement made by an organisation or individual that has been properly authorised by the state government. For the purposes of charging duty under the Act, an adhesive or impressed stamp is included.
What is the significance of revenue stamps?
Revenue stamps are provided by the government to collect taxes on the provision of specific services. Revenue stamps are a type of label provided by the government for collecting taxes or charges; they resemble postage stamps and are used in documents like cash receipts, tax payment acknowledgments, rent receipts, etc. In order to raise money for court maintenance, revenue stamps are frequently utilised to collect fees.
Maharashtracivilservice.Org states that the government must get a specific amount of money from each legally allowed transaction. Revenue is also required for the stamping of receipts or other key papers that show the giving and receiving of money, and the revenue stamp is attached as evidence of this. Prima facie, a properly stamped receipt, debt instrument, or note supersedes a plain paper receipt as admissible legal evidence.
A correctly stamped receipt has an advantage over an unstamped one as far as admissible legal evidence is concerned. Additionally, a stamped rent receipt can be used as the primary evidence of the money supplied and received in the event of a disagreement.
When is a revenue stamp required?
When there is a receipt, whether it be a note, memo, or other written document like this, a revenue stamp needs to be attached.
- Money receipts, checks, bills of exchange, or promissory notes.
- Recognition of movable property received as payment for debt settlement.
- A debt or demand, or a portion of a debt or demand that has been paid off or cancelled, is acknowledged.
When is a revenue stamp not required?
You do not need to attach the revenue if your monthly rent payment is less than Rs 5,000. If you have been paying your rent online and can show proof of payment with your bank statement, you won’t need to create a rent receipt and apply a revenue stamp.
How to purchase a revenue stamp?
Authorised stamp merchants or the local post offices sell revenue stamps. For every stamp, a revenue stamp cost Re 1. These days, revenue stamps are kept by neighbourhood stores and sold by certain e-commerce portals for more money than post offices. To reduce the possibility of receiving phoney stamps, it is advised to purchase it from the post office or authorised stamp sellers.
Does a rent receipt require a revenue stamp?
Even if the rent is paid in cash, no revenue stamp is required if the monthly rent is less than Rs 5,000. The rent receipt must be properly signed by the landlord and bear a revenue stamp if the monthly rent paid in cash exceeds Rs 5,000. Additionally, if the rent is being paid by cheque. The revenue stamp does not need to be placed on the rent receipt.
Rent receipt with revenue stamp
It is required that you give your employer proof of rent payment in order to be eligible for the HRA benefit. To furnish this kind of verification, you must have the landlord’s rent receipt.
The rent receipt has a format that needs to be followed precisely. Only after receiving payment from the renter does the landlord provide the rent receipt. There is no requirement for a revenue stamp on the rent receipt if the rent has been paid online or by cheque. The rent receipt bearing a revenue stamp serves as documentary proof of the transaction when rent is paid in cash. The rent receipt may be used as evidence in court if the landlord and renter are embroiled in a legal dispute.
Revenue stamp’s value on rent receipt
When cash payment exceeds Rs 5,000, you must place a revenue stamp of Re 1 value on the rent receipt. According the revision to Schedule-I of the Indian Stamp Act, 1899.
Format for a rent receipt (filled in)
Rent receipt with a revenue stamp of Rs 1
Section of the rent receipt with a revenue stamp
When a revenue stamp is applied, a rent receipt that is paid in cash becomes legitimate. It includes the following details:
- Name of the tenant
- Name of the landlord
- Rent amount
- Rental period
- Address of the rental property
- Signature of the landlord
- Mode of payment – cash/online/cheque
- Information on additional fees, such a water or power bill.
- If the amount paid in cash on a rent receipt exceeds Rs 5,000, a revenue stamp needs to be applied.
Conclusion
If you do not provide your rent receipts with revenue stamps. Your employer may not only reject them as evidence of your rent payment. But you may also be penalized. Under Section 65 of the Stamps Act, a payee may be fined Rs 100 if they refuse to provide a receipt bearing a revenue stamp.
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