Section 40 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.
When the Collector impounds an instrument, or receives one sent to him as an impounded original, section 40 sets out what he must do. He either certifies that it is duly stamped or not chargeable, or he requires the proper duty together with a penalty. This article states the section as printed in the consolidated text consulted.
Under section 40(1) the Collector, on an instrument impounded by him under section 33 or sent to him under section 38(2), certifies it duly stamped or not chargeable if that is his opinion, or requires the proper duty (or the deficiency) together with a penalty of five rupees, or, if he thinks fit, an amount not exceeding ten times the duty or deficient portion, whether that is more or less than five rupees. If the only defect is a breach of section 13 or 14, he may remit the whole penalty. A certificate that the instrument is duly stamped or not chargeable is conclusive evidence of what it states, and an instrument sent under section 38(2) is returned to the impounding officer.
Scope and a note on the text
This article follows the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021); later amendments should be checked. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so the State of execution must be checked. This article explains the central Act only. The sums of five rupees and ten times the duty are quoted as printed. If your document has reached the Collector, our legal due diligence team can review the stamping position and plan the response.
The heading in the copy reads "Collectors power to stamp instruments impounded", with the apostrophe missing; it is quoted as printed. The section begins with an exclusion, "not being an instrument chargeable with a duty not exceeding ten naye paise only or a bill of exchange or promissory note", which the footnote says replaced "with a duty of one anna or half an anna" (Act 19 of 1958, s. 6). Proviso (a) to section 35, as printed, contains no such exclusion, because the footnote to it records that the words were replaced by Act 21 of 2006, s. 69. The text consulted does not reconcile the two sections, and this article states each as printed. See Section 35.
When section 40 applies
Sub-section (1) applies when the Collector:
- impounds any instrument under section 33; or
- receives any instrument sent to him under section 38(2), that is, an original sent by the person who impounded it.
In both cases the instrument must not be one of the excluded kinds named above. The route to the Collector under section 38 is explained in Sections 38, 39 and 46.
Section 40(1): the two outcomes
Clause (a): duly stamped or not chargeable
"If he is of opinion that such instrument is duly stamped, or is not chargeable with duty, he shall certify by endorsement thereon that it is duly stamped, or that it is not so chargeable, as the case may be." The certificate is endorsed on the instrument itself.
Clause (b): not duly stamped
"If he is of opinion that such instrument is chargeable with duty and is not duly stamped, he shall require the payment of the proper duty or the amount required to make up the same, together with a penalty of five rupees; or, if he thinks fit, an amount not exceeding ten times the amount of the proper duty or of the deficient portion thereof, whether such amount exceeds or falls short of five rupees."
Two points on the wording.
- The base penalty is five rupees. The Collector may instead require an amount not exceeding ten times the proper duty or the deficient portion. The footnote says the words "an amount not exceeding" were inserted by Act 15 of 1904, s. 6.
- The ceiling of ten times applies "whether such amount exceeds or falls short of five rupees". The Collector's discretion is therefore not bound to the five-rupee floor.
Compare the court's route in proviso (a) to section 35, where the penalty is five rupees or, when ten times the duty or deficient portion exceeds five rupees, a sum equal to ten times. The Collector's section uses "an amount not exceeding", so his figure is a range up to the ceiling.
| Point | Section 35, proviso (a) | Section 40(1)(b) |
|---|---|---|
| Who acts | The person admitting the instrument in evidence | The Collector |
| Penalty | Five rupees, or ten times the duty or deficient portion where that exceeds five rupees | Five rupees, or if he thinks fit an amount not exceeding ten times the duty or deficient portion |
| Discretion | As printed, the sum is fixed by the formula | Collector's discretion up to the ceiling |
The proviso: breach of section 13 or 14
"When such instrument has been impounded only because it has been written in contravention of section 13 or section 14, the Collector may, if he thinks fit, remit the whole penalty prescribed by this section." This parallels section 39(2), which lets the Collector refund the whole penalty paid in the same case. For the sections concerned see Sections 13 to 16.
Section 40(2): the certificate is conclusive
"Every certificate under clause (a) of sub-section (1) shall, for the purposes of this Act, be conclusive evidence of the matters stated therein." The conclusiveness is limited in two ways: it attaches to certificates under clause (a) only (duly stamped or not chargeable), and it holds "for the purposes of this Act". The endorsement after duty and penalty are paid is covered by section 42, not by this sub-section; see Section 42.
Section 40(3): return to the impounding officer
"Where an instrument has been sent to the Collector under section 38, sub-section (2), the Collector shall, when he has dealt with it as provided by this section, return it to the impounding officer." The instrument therefore goes back to the person who sent it. Endorsement of an instrument on which duty and penalty have been paid is dealt with in section 42.
Worked example
A tehsil office in a land matter impounds a lease that is short of stamp and, having no authority to admit it, sends the original to the Collector under section 38(2). The Collector forms the opinion that the lease is chargeable and not duly stamped. He requires the deficiency of duty and a penalty. If he fixes the penalty at the base of five rupees, he follows the first limb; if he thinks fit he may fix an amount up to ten times the deficiency. After payment, the instrument is endorsed (section 42) and returned to the impounding officer (section 40(3)). Had the only defect been that the deed was written in breach of section 13, the Collector could have remitted the whole penalty.
Related sections
- Section 41 covers an instrument produced by a person of his own motion within one year of execution, where the Collector is satisfied that the omission was due to accident, mistake or urgent necessity: Section 41.
- Section 45 lets the Chief Controlling Revenue-authority refund a penalty paid under section 35 or 40 on written application within one year of payment, and an excess of duty within three months of the order charging it.
- Section 56 allows the Collector to refer a doubt as to the duty to the Chief Controlling Revenue-authority.
- Section 62 is a separate penal provision for executing instruments not duly stamped, and it allows a penalty paid under section 40 to be set off against any fine imposed.
Need help with a Collector's order?
If an instrument of yours is before the Collector, the penalty, the route and the time limits all matter. Our legal due diligence service can check the stamping position and prepare the response for you.
Key takeaways
- The Collector certifies an impounded instrument as duly stamped or not chargeable, or requires the proper duty (or deficiency) with a penalty.
- The penalty is five rupees, or if he thinks fit an amount not exceeding ten times the duty or deficient portion.
- He may remit the whole penalty where the only defect is a breach of section 13 or 14.
- A clause (a) certificate is conclusive evidence for the purposes of the Act.
- An instrument sent under section 38(2) is returned to the impounding officer once dealt with.
Read next
- Section 41 of the Indian Stamp Act, 1899: instrument not duly stamped by accident, produced within one year
- Section 42 of the Indian Stamp Act, 1899: endorsement after duty and penalty are paid
- Sections 38, 39 and 46 of the Indian Stamp Act, 1899
- Penalty for insufficient stamp duty
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.