Stamp Duty on Agreements in India: How It Is Calculated (2026)

How-to · Stamp Law · Process

Updated for 2026 · Claw Editorial

Stamp duty on an agreement is a tax on the document, and how much you pay depends on the kind of agreement and the State where it is signed. There is no single all-India figure, because stamp duty is largely a State subject, so the rate for the same agreement can differ sharply between States. This guide explains how the duty is calculated, why it varies, how e-stamping works, and how to avoid a penalty later. Last verified October 2026.

01Why there is no single rate

People often ask "how much stamp duty on an agreement" and expect one number. There is no single number, because stamp duty in India is largely set by each State. The same loan agreement, leave and licence, or development agreement can attract very different duty in Maharashtra, Karnataka, Delhi or Tamil Nadu.

This matters because paying the wrong amount has a cost later. A document that is under-stamped is not admissible in evidence until the shortfall and a penalty are paid. So getting the duty right at the start is cheaper than fixing it in court.

02How the duty is set

Stamp duty is charged on the instrument by reference to a Schedule. Under the Indian Stamp Act, 1899, agreements are covered by Article 5 of Schedule I, and most States have a matching article in their own schedule.

Three things decide the amount:

• The nature of the instrument: an agreement, a conveyance, a lease, a power of attorney and a bond are charged differently.
• The State of execution: each State sets its own rate for the instruments within its power.
• The value involved: for many instruments the duty is a percentage of the consideration or the value, called ad valorem duty.

The duty is payable before or at the time of execution. Paying it late, or on a stamp bought after signing, can itself be a defect.

03Union or State: who decides the rate

Stamp duty is split between the Union and the States under the Constitution. The Union sets the rate for a short list of instruments, mainly bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, transfer of shares, debentures and proxies (Entry 91 of the Union List). The States set the rate for all other instruments, including most agreements, conveyances and leases (Entry 63 of the State List).

This is why an agreement that is not on the Union list is governed by the State rate. Many States have passed their own Stamp Act (for example the Maharashtra Stamp Act and the Karnataka Stamp Act), while others use the Indian Stamp Act, 1899 with State amendments.

04Fixed duty versus ad valorem duty

Duty on agreements comes in two broad forms.

Many States charge a small fixed duty on a plain agreement but a higher ad valorem duty where the agreement records a money value or transfers an interest in property. Because the rate and the slabs are set by each State, the only reliable figure is the one in the current State schedule.

05How to pay: e-stamping and franking

There are a few recognised ways to pay stamp duty, and the modes available depend on the State.

• e-Stamp certificate: issued through the Stock Holding Corporation of India Limited (SHCIL), which acts as the Central Record Keeping Agency for e-stamping. You pay the duty and get a tamper-evident e-stamp certificate with a unique number.
• Franking: a bank or authorised agent stamps the document with a franking machine after you pay the duty.
• Physical stamp paper: non-judicial stamp paper of the required value, still used in some States.
• Online State portals: several States run their own e-payment or e-stamping systems.

e-Stamping is now the most common and verifiable method because the certificate can be checked online against the SHCIL record.

06What happens if you under-pay

If the agreement is stamped for less than the correct duty, it is treated as not duly stamped. The court or authority must impound it, and it cannot be used as evidence until the deficit duty and a penalty (up to ten times the shortfall) are paid to the Collector.

This is the single most common stamp problem in practice, and it is avoidable. For the full process of impounding, penalty and cure, see insufficiently stamped documents: consequences and impounding.

The cheapest stamp duty is the one you pay correctly at execution. Fixing it later can cost up to ten times the shortfall.

07Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

A stamp duty question becomes a dispute when a document is challenged in a suit, a sub-registrar refuses registration, or a State revenue authority raises a demand, and because duty is a State subject the answer sits in how each High Court has read its own Stamp Act. Claw lets you reach that reading: a library of more than 30 crore judgments, with High Court rulings covered from 1990 and the Supreme Court from 1950, answers in under 5 seconds how courts in your State have treated duty on a lease, loan or development agreement. The same account tracks a live stamp matter, following its orders and hearing dates by party or advocate name across the 9,102 courts, benches and forums Claw covers.

Claw does not use customer case documents to train AI models, so a draft agreement you check stays confidential. Start a free Claw account to follow a stamp matter by party or advocate name. To search the wider body of law, see case search across Indian courts.

08Sources and further reading

• India Code (Indian Stamp Act, 1899, official text and Schedule I): indiacode.nic.in
• SHCIL e-Stamp (e-stamping and certificate verification): shcilestamp.com
• Claw: clawlaw.in

This guide is general information, not legal advice. Stamp duty rates are set and amended by each State, so check the current Stamp Act and schedule of the relevant State and take advice from counsel before you act.

09Frequently asked questions