Pay your Stamp Duty with Ease

Citizens in Maharashtra can pay both the stamp duty and registration fee at the same time through eSBTR, for the first time in India.  

eSBTR is one of the various types of stamp duty payments paid at the designated bank. It is an alternative to eStamping, available only in Maharashtra. But should you obtain eSBTR or eChallan at the time of stamp duty payment? 

eSBTR and eChallan differ on the basis of mode of payment. Knowing the difference between the two can give you clarity and help you make the right decision when you’re paying stamp duty. 

Before jumping to the difference between eSBTR and eChallan, let us understand what stamp duty is and why it is charged.

What is stamp duty, and why is it charged?

Stamp duty is a fixed tax paid to the government to register legal documents or transactions between two or more parties. The amount varies depending on the state, region, and gender. Stamp duty is subject to section 3 of Indian Stamp Act, 1899. Stamp duty must be paid on time in full. 

For example, in urban areas of Haryana, a man has to pay stamp duty of 8%, whereas a woman has to pay 6%. In contrast, a man has to pay 6% stamp duty in rural areas, and a woman has to pay 4%. 

Before income and consumption taxes became the primary source of income for the government, they relied heavily on property taxes. Stamp duties were hence a significant source of income. Even today, they are levied to fund the government’s activities.  

There are different ways to pay stamp duty. Some of them include eStamping, non-judicial stamp paper, franking, notary stamp, and many more. 

Online stamp duty payment or eStamping is prevalent today and is more convenient & secure than traditional methods to pay stamp duty. SHCIL (Stock Holding Corporation of India Limited), the central record-holding agency, keeps all the transaction records of the stamp duty payment. eStamping reduces TAT and document execution costs with boosted efficiency.

In Maharashtra, eStamping is not an option because the state did not renew the SHCIL license. Hence, eSBTR stamp duty payment is an alternative.

Defining eSBTR and eChallan

eSBTR, abbreviated as electronic Secure Bank & Treasury Receipt, is an online stamp duty payment service. eSBTR looks like a non-judicial e stamp paper and is printed on a secure stationery paper provided by the Indian Security Press. It comes with in-built security features that include watermark, background tint, perforated document logo, micro security threads and more. They prevent duplication, tampering and fraud.

eSBTR-sample

Only the following authorised banks are integrated with eSBTR stamp duty payment – IDBI bank, Canara Bank, Punjab National Bank, and Bank of Maharashtra. However, eSBTR is offered by eSBTR service providers who have integrated with these banks. 

In order to pay stamp duty via eSBTR, customers must follow the steps below – 

  • Log into an authorised bank website or e stamping website 
  • The customer will have two options to initiate the process – 
    • They can upload the document to the portal or choose an existing document
    • They can use a template to generate a new document
  • The customer can then select a type of signature and add parties to eSign the document
  • Then proceed to add the signer’s information
  • The customer has to add all the transaction details – stamp state (in this case, Maharashtra), stamp amount, document type, eSBTR related information, etc.
  • Upon providing all the required details, the estamping website will generate the stamping request when the customer clicks the button
  • Once a request is placed, an eSBTR receipt is generated and merged with the document. After this, a signature invitation is sent to the signer’s email.

Just as simple as that and it takes a few minutes to complete the process of paying stamp duty via eSBTR.

What is eChallan?

eChallan in the context of stamp duty payment is an electronic challan considered as a simple receipt that is collected upon paying the registration fee online. A registration fee is a fee that the customer has to pay for the procedure and the documentation process. It is subject to The Registration Act, 1908, an act to consolidate the validity related to the registration of documents. 

 

The registration procedure involves providing the following documents – 

  • Identification documents of both the seller and the buyer
  • Original deed document with two photocopies to the sub-registrar’s office
  • Stamp duty payment proof
  • Details of the transaction payment
  • Khata certificate with the tax receipts paid. 

When the customer provides the above documents, they are given a receipt containing a unique serial number that concludes the registration process. 

Now coming to the question, how is eSBTR different from eChallan?

They both are receipts issued upon payment of stamp duty and registration charges. 

However, here’s how they differ –

eChallan eSBTR
eChallan or simple receipt is printed on a normal paper eSBTR is printed on secure stationery that comes with in-built security features
eChallan is proof of registration fees eSBTR is a proof of stamp duty payment
eChallan is issued at the authorized participating bank counter or online eSBTR is issued only by the authorizing officer of the participating bank on payment of stamp duty in virtual treasury.
eChallan must be used for compulsorily registrable documents only esbtr can be used for optionally/ compulsorily registrable documents
If the customer has opted for eChallan, they can pay the fee via net banking and take a print of the eChallan after successful payment. They need not go to the bank. The customer must submit the proof of payment, which is received when the payment is successful via net banking and print the proof to submit it to the authorized bank branch to obtain eSBTR.
eChallan needs to be defaced by the registration authorities eSBTR needs to be defaced by the Stamp and Registration Information Technology Administration (SARITA)

eChallan will not be considered as a simple receipt in some instances – 

  • Payment made for the purchase of physical stamps
  • For purchasing franking codes
  • Payment of consolidated stamp duty
  • Stamp duty payment collected against the issues of eStamps. 

Additionally, all the stamps purchased will be rendered invalid if they are used within six months from the date of purchase. 

To conclude, the major difference between the two receipts is that simple receipt or eChallan is used for registrable documents only, whereas eSBTR is used for optionally/ compulsorily registrable documents. 

eSBTR isn’t the only alternative available for stamp duty payment in Maharashtra. There are other options like franking and non-judicial stamp paper.

Other alternatives for eStamping in Maharashtra

Franking

As eStamping is not an option in the state of Maharashtra, there are other ways to pay the stamp duty. One of them is franking. If a customer uses franking, they have to submit an application to the authorised bank or an agency. Franking of documents is simply stamping the documents with a franking machine.

The document is printed on plain paper before the parties sign it. The document is then affixed with a stamp ascertaining that the stamp duty value has been paid. 

An advantage of franking is that it is quick and convenient if a customer is paying with cash or Demand Draft. 

The drawback is that franking machines are not available at all banks, as only those who have the franking license/permission of the state government are allowed to use it. 

Also, each authorised bank is allotted a limited franking quota and cannot frank the customer’s documents beyond that limit. If the customer’s denomination requirements exceed the franking quota, then they have to inform the bank beforehand. 

Non-Judicial stamp paper

In non-judicial stamp paper, the details of the transaction are written or a blank stamp paper is attached with the documents and the executants sign it. This alternative is the most common way to pay stamp duty. 

The drawback here is that stamp vendors do not keep stamp papers of very low value (below INR 100) or of high value (above INR 700). So if the customer has a large denomination to meet, they have to purchase multiple papers to meet the requirement which makes the process more inconvenient. 

Another drawback is that there is no way for an ordinary citizen to ensure the authenticity of the stamp vendor or the stamp papers. There is a risk of purchasing counterfeit papers from unlicensed vendors. 

Customers can avoid being at the disadvantage of franking and non-judicial stamp paper by resorting to digital stamps or  online stamp duty payment. It is paid in real-time, is quicker, much more secure, time-saving and more convenient.

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