Section 49 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 49 opens Chapter V, which deals with allowances for stamps that were bought and then could not be used. It lists the cases in which the Collector may make allowance for impressed stamps that were spoiled, from a paper ruined before signing to an executed instrument that proved void or unfit.
The Collector may make allowance for impressed stamps spoiled in the cases listed, on application within the period in section 50, if he is satisfied as to the facts, and subject to State rules on evidence and enquiry. The cases are: (a) paper spoiled before any instrument written on it is executed; (b) a document written out but not signed or executed by any party; (c) unaccepted or unused bills of exchange payable otherwise than on demand and promissory notes, and spoiled ones replaced by an identical completed bill or note; and (d) executed instruments found void, unfit, incomplete, failed, superseded or spoiled, with eight listed grounds. For an executed instrument, no legal proceeding must have begun in which it could be given in evidence, and it must be given up to be cancelled.
What this section does
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. Section 49 allows an allowance for stamps already bought; it does not fix any rate. The State Government's rules on the evidence required and the enquiry to be made are not in the text consulted and are not described. If you hold a spoiled stamp and are unsure whether it qualifies, our legal consultation service can look at the facts with you.
The section applies only to impressed stamps, those printed or impressed on paper rather than adhesive stamps. The Explanation at the end adds that the Collector's certificate under section 32 that full duty has been paid counts as an impressed stamp for this purpose. Time limits are in Section 50, and the choice of allowance in Sections 52 and 53. The site's guides on allowance and refund of stamp duty and stamp duty refund give the outline.
The opening words
"Subject to such rules as may be made by the State Government as to the evidence to be required, or the enquiry to be made, the Collector may, on application made within the period prescribed in section 50, and if he is satisfied as to the facts, make allowance for impressed stamps spoiled in the cases herein after mentioned."
Four conditions come out of this sentence:
- Rules. The State Government may make rules on evidence and enquiry. None is in the text consulted.
- Application in time. The period is in section 50.
- Satisfaction. The Collector must be "satisfied as to the facts".
- Discretion. He "may" make allowance. The text does not say he must.
Clause (a): paper spoiled before execution
"The stamp on any paper inadvertently and undesignedly spoiled, obliterated or by error in writing or any other means rendered unfit for the purpose intended before any instrument written thereon is executed by any person."
The test is that the paper was spoiled inadvertently and undesignedly, and before any instrument written on it was executed by anyone. A stamp paper torn by accident, or ruined by a drafting error before anyone signed, falls here.
Clause (b): written but not signed
"The stamp on any document which is written out wholly or in part, but which is not signed or executed by any party thereto." A draft that was typed or written but never signed is covered, whether completely or only partly written.
Clause (c): bills of exchange and promissory notes
Clause (c) deals with "bills of exchange ... or promissory notes". The bracketed words were inserted by Act 5 of 1927, s. 5, and the word "Cheques" and other references to cheques were omitted by the same section, according to the footnotes. Three cases:
| Sub-clause | Case |
|---|---|
| (1) | The stamp on such a bill of exchange signed by or on behalf of the drawer which has not been accepted or made use of in any manner, or delivered out of his hands for any purpose other than tender for acceptance. The proviso: the paper must not bear any signature intended as or for an acceptance |
| (2) | The stamp on a promissory note signed by or on behalf of the maker which has not been made use of in any manner or delivered out of his hands |
| (3) | The stamp used or intended for such a bill or note signed by or for the drawer, but spoiled or rendered useless by omission or error, even though the bill may have been presented for acceptance, accepted or endorsed, or the note delivered to the payee. The proviso: another completed and duly stamped bill or note, identical in every particular except the correction of the omission or error, is produced with the spoiled one |
Example. Tarun Mehta signs a promissory note as maker but the note is never delivered or used. Under (c)(2) the stamp on it can be the subject of an allowance. If he had delivered it to the payee and then found a drafting error, (c)(3) would apply only on producing another completed and duly stamped note identical except for the correction.
Clause (d): executed instruments
Clause (d) covers "the stamp used for an instrument executed by any party thereto" which:
| No. | Ground |
|---|---|
| (1) | Has been afterwards found to be absolutely void in law from the beginning |
| (2) | Has been afterwards found unfit, by reason of any error or mistake in it, for the purpose originally intended |
| (3) | By reason of the death of a person who needed to execute it, without having done so, or his refusal to execute, cannot be completed to effect the intended transaction in the form proposed |
| (4) | For want of execution by some material party, and his inability or refusal to sign, is in fact incomplete and insufficient for its purpose |
| (5) | By reason of a person's refusal to act under it, or to advance money to be secured by it, or the refusal or non-acceptance of any office granted by it, totally fails of its intended purpose |
| (6) | Becomes useless because the transaction is effected by some other instrument between the same parties bearing a stamp of not less value |
| (7) | Is deficient in value and the transaction has been effected by some other instrument between the same parties bearing a stamp of not less value |
| (8) | Is inadvertently and undesignedly spoiled, and another instrument between the same parties for the same purpose is executed and duly stamped in its place |
The proviso for executed instruments
"Provided that, in the case of an executed instrument, no legal proceeding has been commenced in which the instrument could or would have been given or offered in evidence and that the instrument is given up to be cancelled." Two conditions follow: no legal proceeding has begun in which the instrument could have been used as evidence, and the instrument is surrendered for cancellation. A person who wants an allowance must therefore not have used the instrument in a proceeding.
Example. Kiran Joshi and Latha Reddy sign a loan agreement on stamp paper. Before any money is lent, the lender refuses to advance it. Under (d)(5) the stamp may qualify for allowance, provided no proceeding has begun in which the agreement could be offered in evidence and the agreement is given up to be cancelled. The time limit for an application under (d)(5) is shorter than for most others, as the next article explains.
The Explanation
"The certificate of the Collector under section 32 that the full duty with which an instrument is chargeable, has been paid, is an impressed stamp within the meaning of this section." So a Collector's endorsement of full duty can itself be treated as a stamp for allowance. See Section 32.
What section 49 does not cover
- Adhesive stamps. The section speaks of "impressed stamps".
- Unused stamps that were not spoiled. Those are dealt with by section 54, covered in the article on Section 54.
- Stamps wrongly used. Section 52 deals with a stamp of the wrong description or greater value than needed.
A practical checklist for the applicant: identify which clause fits; note the dates (the periods run from the date of the instrument or spoiling); keep the spoiled paper or instrument; keep the replacement instrument in clauses (c)(3) and (d)(8); and do not tender an executed instrument in evidence before applying.
Need help with a spoiled stamp?
Whether a stamp qualifies depends on which clause fits the facts and on a short time limit. Our legal consultation team can check the clause, the dates and the papers before you apply to the Collector.
Key takeaways
- Section 49 lets the Collector make allowance for impressed stamps spoiled in the listed cases, on application within the period in section 50.
- The cases cover paper spoiled before execution, written but unsigned documents, unused or spoiled bills and notes, and eight grounds for executed instruments.
- For an executed instrument, no legal proceeding must have begun in which it could be given in evidence, and it must be given up to be cancelled.
- The Collector's section 32 certificate counts as an impressed stamp.
- The State Government's rules on evidence and enquiry are not in the text consulted.
Read next
- Sections 50 and 51 of the Indian Stamp Act, 1899: time limit for spoiled stamp claims and printed forms
- Sections 52 and 53 of the Indian Stamp Act, 1899: allowance for misused stamps and how it is given
- Section 54 of the Indian Stamp Act, 1899: allowance for stamps not required for use
- Stamp duty refund: when and how to apply
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.