Revenue Stamps Explained: Details, Registration, Format

India is one of the biggest consumers of revenue stamps. For the sake of utilizing the revenue stamps, one needs to collect taxes or fees. The revenue stamps are used for the sake of indicating the payment paid on any object or paper.

So, let us check the details of what a revenue stamp is and the purpose it serves.

What Is A Revenue Stamp?

A revue stamp is mainly a means for the sake of collecting income or fees which, in turn, is used for maintaining the courts.

As per the Indian Stamp Act 1899, a stamp needs to be fixed if the receipt has a value above Rs. 5000.

The Indian Stamp Act was first formulated in 1899 and it was revised 51 times by the year 2004. It is always revised from time to time in order to accommodate the changes as per the situation.

Components Of The Revenue Stamp Receipt

When you have a revenue stamp receipt, it needs to include certain things mandatorily. Here are the details of what needs to be there.

It acknowledges the receipt of any form of money, cheque, bill of exchange, or even a promissory note
It acknowledges the discharge of any debt or demand
It acknowledges the receipt of movable property in exchange for debt
It is significant of import of any such acknowledgement

So, these are some of the key components that a revenue stamp receipt is indicative of.

Where Should I Get Revenue Stamps?

You can find revenue stamps at all postal offices. You may find it with some local shopkeepers too as they tend to buy the stamps from post offices and sell them to people at a markup. If you are not looking to spend extra, you should make it a point to buy it from the postal offices exclusively.

Revenue Stamps And Rent Receipts

A revenue stamp will be required when you are dealing with rent receipts. This becomes mandatory when you are looking to claim your HRA.

As per the revenue stamp rules, if you are submitting the rent receipts to your employer so that you could claim the tax deductions, you need to ensure that your requests come with a revenue stamp affixed. This helps in legalizing the document as they serve as proof of the expenses.

Rent receipts are documentary proof that lists the amount you have agreed to pay as rent and they can be used by your employer to assess your tax dues and make the right deductions. You will be able to claim a refund based on the rental allowance that you are offered in your salary package.

When you submit the rent receipts to your employer, you need to do it on a one-rupee revenue stamp paper. This is regardless of the payment method you have been using for the sake of making the payment.

Only if your rent is less than Rs. 3000 a month, you will not need to produce any rent receipt. In this case, you don’t need any revenue stamp. The rental agreement is not a mandatory document to be submitted for the HRA refund. However, the HRA department tends to ask for it once to assess the legitimacy of your rent. A lot of employees in order to claim the refund started producing fake rent receipts.

This is why the need was felt to introduce the need to submit the rental agreement as this ensures that your tenancy is legitimate.

Who Can Apply For HRA?

If you are wondering what is the eligibility for your HRA, here are the details you need to know.

If you live in a rental home and you are an as salaried person, you are eligible for HRA.
Further, your salary package needs to have a compound for HRA. Most salaries will have one HRA component as a part of their salary for paying for their accommodation.
Even if you live in your parent’s house but you can show a rental receipt and you don’t own the house, you can still claim the deduction.
The tax deduction is also available to self-employed people who are valid under Section 80G of the statute.

The Benefits Of The Rent Receipts

A rent receipt is a record of the payment made by the tenant to the landlord. When the landlord gets the payment, the tenant gets a receipt.

With the help of the rent receipts, you will be able to get the right refund. This helps you get the right concession and refund in tax. The receipts are valid document that proves the rent you have paid in exchange for the accommodation. Learn more about the rental agreement in detail.

Details Of A Filled Rent Receipt

If you want your rent receipts to be valid, it needs to be packed with certain details. Here they are.

The name of the landlord
The name of the tenant
The rent amount
The signature of the landlord
The signature of the tenant
The address of the property
The terms of the rent
The rent payment method

Apart from this, you need to understand that if the rent you are paying is done in cash and it is in excess of Rs. 5000 every month, you will need to submit a revenue stamp on the cash voucher.

If the annual payment you pay as rent is in excess of Rs. 1 lakh, then you need to submit the PAN to your landlord.

Format

When you are making a rent receipt, you need to know that there are several formats available. It is best advised to find the right desired format and stick to it. This is the right way to make sure that the rent receipts adhere to the best of instruction and it is also laden with the right information.

It is not important to have the same format always but knowing about the format is a great way to weed out the errors and ensure that the receipt will serve the need and it will at least allow you to get your HRA.

The rent receipts are extremely important if you want to avail your tax benefits in the form of HRA.

So, the next time you submit the rent receipts, make sure that you have affixed the revenue stamp. The presence of revenue stamps can be traced back to a long time ago and it has continued to be in use for a long time now.

It will likely stay so and will help the government generate the right revenues. Their importance cannot be undermined as they have been indisputable and in use for too long.

So, now that you are aware of these details, you should be able to get a clear picture of why rent receipts need to be fixed with revenue stamps.

FAQ

Where should you buy the revenue stamps from?

The revenue stamps should be purchased from the postal office. The local shops also sell these stamps but they usually do so at a slight markup price. However, they will not cost you more than Re. 1 so it is a nominal charge that you pay.

What if my rent receipt doesn’t have a revenue stamp?

If you are paying in cash and the rent amount is in excess of Rs. 5000, it becomes mandatory to fix the revenue stamp. Fixing the stamp makes this document legal and indicates that the right payment has been made.

What if my landlord fails to produce his PAN?

If you are paying an annual rent in excess of Rs. 1 lakh, your landlord needs to produce his PAN card. In case he doesn’t, he will need to give a written declaration along with form 60. Only then can the employee be entitled to get the HRA deductions.

In most cases, for smooth refunds, it is always advised that the landlord produces the PAN when he is making a rental income in excess of 1 lakh annually.

Can you claim HRA even when you are paying in cash?

Yes, you can claim the HRA even when you make a payment in cash because there is no restriction on the method of payment that you are using.