Revenue stamp on rent receipt: When is it needed?

[ecis2016.org] What is the need for a revenue stamp and when should it be affixed on a rent receipt? We explain…

Revenue stamps are a kind of label issued by the government, for collecting taxes or charges and are used in documents, such as receipts of cash, tax payment acknowledgment, rent receipt, etc.

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According to the Indian Stamp Act, 1899, a ‘stamp’ means any mark, seal, or endorsement by any agency or person duly authorised by the state government and includes an adhesive or impressed stamp, for the purpose of duty chargeable under the Act. Now let us find out where you can use the revenue stamp.

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Revenue stamp: When is it needed?

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Revenue stamp has to be affixed when there is a receipt including note, memorandum, or writing such as:

• Receipt of money, a bill of exchange, cheque, or promissory note.
• Acknowledgement of movable property received in satisfaction of a debt.
• Acknowledgment for debt or demand, or any part of a debt or demand that has been satisfied or discharged.

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From where you can buy a revenue stamp?

Revenue stamps can be purchased from the local post offices. The cost of a revenue stamp is Re 1 for each stamp. Nowadays local shops and some online shopping portals also keep revenue stamps and sell them at a higher price than the post offices. It is advisable to buy it from the post office to avoid chances of getting fake stamps.

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Is a revenue stamp needed for the rent receipt?

If the monthly rent paid in cash exceeds Rs 5,000, then, it is mandatory to affix a revenue stamp on the rent receipt and get it duly signed by the landlord. If the monthly rent is below Rs 5,000, then, there is no need for a revenue stamp even if the rent is paid in cash.

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If you want to claim the HRA benefit from your employer, then, it is mandatory to provide the confirmation of rent payment to the employer. To provide such confirmation, you need to get the rent receipt from the landlord. There is a prescribed format of the rent receipt, which should be filled properly. The landlord gives the rent receipt only after getting the rent from the tenant. If the rent has made the payment online or through a cheque, then, there is no need for a revenue stamp on the rent receipt. When rent is paid in cash, the rent receipt affixed with a revenue stamp becomes documentary evidence to establish the transaction. If there is a legal dispute between the landlord and the tenant, the rent receipt can be produced as evidence in court.

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Component of rent receipt with revenue stamp

A rent receipt for a cash payment of rent becomes valid when affixed with a revenue stamp and consists of the following information:

• Name of the tenant
• Name of the landlord
• Address of the rental property
• Rent amount
• Rental period
• Mode of payment – cash/online/cheque
• Signature of the landlord
• If the rent amount per annum exceeds Rs 1 lakh, then, the PAN number of the landlord should be furnished on the rent receipt.
• Details of other charges such as water bill, electricity charge, etc.
• Revenue stamp should be affixed if cash paid in a rent receipt exceeds Rs 5,000.

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