Section 2 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 2 is the definitions section of the Indian Stamp Act, 1899. This article covers the general terms that every other section leans on: "instrument", "executed", "duly stamped", "chargeable", "stamp", "impressed stamp", "paper", "Collector", "India", "banker" and "soldier". The deed names (conveyance, lease, mortgage-deed and the like) are in a separate article, and the bill, note and insurance terms in another.
An "instrument" is every document by which a right or liability is created, transferred, limited, extended, extinguished or recorded, and it now includes electronic documents made for a transaction in a stock exchange or depository. "Executed" means signed, and includes attribution of an electronic record. An instrument is "duly stamped" only if it bears a stamp of not less than the proper amount, affixed or used in accordance with the law in force. Check the State where you execute the document for the duty itself.
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 rate. The definitions below matter because a document that is not an "instrument" in this sense is not caught by the Act at all, and a document that is one must be stamped before or at execution (see section 17, covered in its own article). If you are drafting a document and are unsure whether it counts, an agreement drafting review can settle the point before you sign.
The section opens with "In this Act, unless there is something repugnant in the subject or context". So each meaning below gives way if a section clearly uses the word differently.
Clause (14): "instrument"
Clause (14) was substituted by Act 7 of 2019, section 12, with effect from 1 July 2020 (the footnote adds that it was earlier notified with effect from 9 January 2020 followed by 1 April 2020). It says "instrument" includes:
- (a) every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded;
- (b) a document, electronic or otherwise, created for a transaction in a stock exchange or depository by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded; and
- (c) any other document mentioned in Schedule I.
It "does not include such instruments as may be specified by the Government, by notification in the Official Gazette". The clause does not say which Government, and the text consulted contains no such notification, so none is described here.
The words "purports to be" are worth noticing. A document that only claims to create a right is still caught. The test is what the document does or claims to do, not the heading on its first page.
Clause (12): "executed" and "execution"
"Executed" and "execution", used with reference to instruments, mean "signed" and "signature". A footnote shows that Act 7 of 2019, section 12, added words so that the meaning also "includes attribution of electronic record within the meaning of section 11 of the Information Technology Act, 2000 (21 of 2000)". The copy shows a footnote that clause (12A) is omitted; nothing more is said here about it.
This matters in practice because duty is tied to execution. Section 3 charges instruments "executed" in India, and section 17 requires stamping "before or at the time of execution". See also our note on testimonium clauses and execution of deeds.
Clause (11): "duly stamped"
An instrument is "duly stamped" when it "bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for the time being in force in India". Two tests run together:
- the amount of stamp must not be less than the proper amount; and
- the stamp must have been affixed or used as the law requires (for example, an adhesive stamp must be cancelled under section 12).
The clause ends with a colon in the copy, with nothing following it.
Clause (6): "chargeable"
"Chargeable" means, for an instrument executed or first executed after the commencement of the Act, chargeable under this Act. For any other instrument, it means chargeable under the law in force in India when the instrument was executed or, where several persons executed it at different times, first executed. The words "first executed" are the key: when signatures are collected on different days, the date of the first signature fixes the law.
Clauses (26), (13) and (18): "stamp", "impressed stamp" and "paper"
| Clause | Term | What the text says |
|---|---|---|
| (26) | Stamp | 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 purposes of duty chargeable under this Act (inserted by Act 23 of 2004, section 117) |
| (13) | Impressed stamp | includes (a) labels affixed and impressed by the proper officer and (b) stamps embossed or engraved on stamped paper |
| (18) | Paper | includes vellum, parchment or any other material on which an instrument may be written |
Clause (26) is wide: it is not limited to a physical adhesive label. What counts is that the mark, seal or endorsement comes from an agency or person duly authorised by the State Government. The text consulted says nothing about how that authority is given or how a stamp is bought, so this article describes no procedure.
Clauses (9), (13A), (1A) and (25)
- Collector (clause 9): within the limits of the towns of Calcutta, Madras and Bombay, the Collector of Calcutta, Madras and Bombay respectively, and elsewhere the Collector of a district. It includes a Deputy Commissioner and any officer whom the State Government may appoint by notification in the Official Gazette. The Collector has a central role in adjudication (section 31) and impounding.
- India (clause 13A): "the territory of India excluding the State of Jammu and Kashmir". Section 1(2) as printed shows words omitted by Act 34 of 2019, yet this clause still carries the exclusion. The copy is inconsistent; check the official text and the present position.
- Banker (clause 1A): includes a bank and any person acting as a banker (inserted with the substituted clause (1) by Act 7 of 2019).
- Soldier (clause 25): any person below the rank of non-commissioned officer enrolled under the "Indian Army Act, 1911 (8 of 1911)". That Act and its corresponding provision should be checked in the current law.
Clause (8) is omitted in the copy, with a footnote attributing the omission to the A.O. 1937. Nothing is said here about what it provided.
A worked example
Sunrise Agro Private Limited signs an agreement with a supplier. The agreement says the supplier will deliver grain by a fixed date and Sunrise will pay on delivery. It also records that an older arrangement stands ended. Under clause (14)(a), the document creates rights and liabilities and extinguishes an earlier one, so it is an instrument. If the company's director signs it by attributing an electronic record to himself in the manner section 11 of the Information Technology Act describes, clause (12) treats that as execution. When the agreement is later presented, whether it is "duly stamped" turns on clause (11): was a stamp of at least the proper amount affixed or used in accordance with the law? The proper amount depends on the State where the agreement is executed.
Need help with documents that may attract duty?
If you are preparing an agreement, deed or declaration and want a second look at how it will be treated for stamp duty, our agreement drafting service can review the drafting with the Act's definitions in mind. A clear description of what the document does is the first step to stamping it correctly.
Key takeaways
- "Instrument" covers every document that creates, transfers, limits, extends, extinguishes or records a right or liability, including electronic documents for stock exchange and depository transactions.
- "Executed" means signed and includes attribution of an electronic record.
- "Duly stamped" needs a stamp of not less than the proper amount, used as the law requires.
- "Stamp" can be any mark, seal or endorsement by an authorised agency, not only an adhesive label.
- The Government that may exclude instruments under clause (14) is not named in the clause.
Read next
- Section 1 of the Indian Stamp Act, 1899: short title, extent and commencement
- Section 2 of the Indian Stamp Act, 1899: conveyance, bond, lease, mortgage-deed and settlement
- Section 3 of the Indian Stamp Act, 1899: instruments chargeable with stamp duty
- Key definitions under the Stamp Act: instrument and duly stamped
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.