Section 18 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 18 of the Indian Stamp Act, 1899 deals with documents signed only outside India. Unlike an instrument executed in India, which must be stamped before or at execution (section 17), such an instrument may be stamped within three months after it has first been received in India. If a private person cannot stamp it with the prescribed stamp, the Collector will do so within the same period.
An instrument chargeable with duty, executed only out of India and not a bill of exchange or promissory note, may be stamped within three months after it has been first received in India (section 18(1)). If a private person cannot duly stamp it with the stamp prescribed, it may be taken to the Collector within the three months, who stamps it with a stamp of the value the person requires and pays for (section 18(2)). Bills and notes drawn outside India follow section 19.
How to read this article
This article is based on the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021); later amendments should be checked. It explains the central Act only. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so the State must be checked for the amount; for an instrument signed abroad, the text consulted does not say which State's law fixes the duty, so the point should be confirmed against the law of the place in India where the instrument is received and used. If you are dealing with a cross-border contract, a contract review before it travels can save time on arrival.
Where section 18 fits
Section 3 sets out which instruments are chargeable. Clause (c) of section 3 charges an instrument (other than a bill of exchange or promissory note) mentioned in Schedule I, which is executed out of India, relates to property or a matter or thing in India, and is received in India. Section 18 then deals with the time and manner of stamping such an instrument. The article on section 3 explains the charging clauses.
Section 18(1): the three months
The sub-section reads: "Every instrument chargeable with duty executed only out of India, and not being a bill of exchange or promissory note, may be stamped within three months after it has been first received in India."
The elements are:
- "chargeable with duty" under the Act;
- "executed only out of India". The word "only" matters. An instrument executed partly in India and partly abroad is not described by these words, and the text consulted does not say how such an instrument is treated under this section;
- "not being a bill of exchange or promissory note". A footnote shows the word "cheque" was omitted from this place by Act 5 of 1927, section 5. Bills and notes drawn outside India are dealt with in section 19;
- "may be stamped within three months after it has been first received in India". The period runs from first receipt, not from the date of execution. The word "may" gives permission; it does not itself say what happens after the three months.
The footnote also shows that "India" was substituted for "the States" by Act 43 of 1955, section 2, with effect from 1 April 1956.
Section 18(2): the Collector
Sub-section (2) reads: "Where any such instrument cannot, with reference to the description of stamp prescribed therefore, be duly stamped by a private person, it may be taken within the said period of three months to the Collector, who shall stamp the same, in such manner as the State Government may by rule prescribe, with a stamp of such value as the person so taking such instrument may require and pay for."
The copy prints "therefore" where "therefor" is evidently meant; the sense is "for it". The trigger is that the instrument cannot, with reference to the description of stamp prescribed, be duly stamped by a private person. In that case:
- the instrument is taken to the Collector within the three months;
- the Collector stamps it, "in such manner as the State Government may by rule prescribe"; and
- the stamp is of such value as the person taking the instrument requires and pays for.
The State rule on the manner of stamping is not in the text consulted, so the manner is not described. "Collector" is defined in section 2(9).
Timelines compared
| Item | Section 17 (executed in India) | Section 18 (executed only out of India) |
|---|---|---|
| Time to stamp | Before or at the time of execution | Within three months after first received in India |
| Who stamps | The person responsible under the State's stamping rules | A private person, or the Collector if a private person cannot |
| Bills and notes | Covered | Excluded; section 19 applies |
| Where the Collector comes in | Not in the section | Section 18(2) |
What follows after the three months
Section 18 does not say what happens if the three months pass without stamping. The later chapters deal with an instrument that is not duly stamped, including adjudication (section 31) and the certificate under section 32. In section 32, the proviso refers to the period of three months from first receipt in India for instruments executed out of India, and that is explained in the article on section 32. A reader whose window has run should read those sections and consider the penalty provisions. This article describes none of them.
A worked example
Meridian Components Private Limited in Pune agrees a supply contract with a manufacturer in another country. The manufacturer signs it abroad on 10 September and sends it by courier, and the document is first received at Meridian's office in Pune on 3 October. The contract was executed only out of India and is not a bill or note. Under section 18(1), it may be stamped within three months after 3 October. If a private person cannot duly stamp it with the stamp prescribed for its description, section 18(2) allows it to be taken to the Collector within the same three months, and the Collector will stamp it with a stamp of the value Meridian asks for and pays for, in the manner the State's rules prescribe.
If, instead, Meridian's director had also signed the contract in Pune, the instrument would not have been executed "only out of India", and section 17 would need to be read with it. The text consulted does not settle how a mixed case is treated, so the safer course is to treat the Indian signing as execution in India and stamp before or at that signing.
Need help with a contract signed abroad?
Cross-border contracts raise timing questions that are easy to miss: when was the document first received, what stamp is prescribed, and who stamps it. A contract review and vetting can help you plan the stamping window before the document arrives.
Key takeaways
- Section 18 applies to chargeable instruments executed only out of India, other than bills and notes.
- Such an instrument may be stamped within three months after it is first received in India.
- If a private person cannot duly stamp it, the Collector may stamp it within the same period, with a stamp of the value requested and paid for.
- The State's rule on the manner of stamping is not in the text consulted.
- Bills and notes drawn outside India follow section 19.
- The copy prints "therefore" where "therefor" is intended.
Read next
- Section 17 of the Indian Stamp Act, 1899: instruments executed in India stamped before or at execution
- Section 19 of the Indian Stamp Act, 1899: bills of exchange and promissory notes drawn outside India
- Section 3 of the Indian Stamp Act, 1899: instruments chargeable with stamp duty
- Stamp duty on contracts: which agreements need stamping
Disclaimer: Based on the consolidated text of the Indian Stamp Act, 1899 published by the Department of Revenue, whose latest amendment shown is Act 13 of 2021, as consulted on 2 October 2026. Only the central text is covered: stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, and State amendments, rules, notifications and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.