Security Deposit Receipt

Stamp duty

A receipt for a sum above Rs. 5,000 is chargeable under Article 53 of Schedule I to the Indian Stamp Act, 1899 with duty of Re. 1 — the familiar revenue stamp, affixed to the receipt and cancelled by the signature of the person signing, written across the stamp. The threshold was raised from Rs. 20 to Rs. 5,000 by the Finance (No. 2) Act, 2004, so almost every tenancy deposit receipt crosses it. There is no ad valorem duty: the stamp is Re. 1 whether the deposit is Rs. 20,000 or Rs. 20 lakh, because the duty on the tenancy itself sits on the rent agreement or lease deed, not on this receipt. Leaving the stamp off does not make the payment or the receipt invalid, and it does not affect the landlord's obligation to refund; the consequence is procedural — under proviso (b) to section 35 of the Act an unstamped receipt is admitted in evidence on payment of a penalty of Re. 1 by the person producing it, and section 65 provides a fine of up to Rs. 100 on a person who refuses to give a duly stamped receipt when one is demanded. Several states run their own stamp legislation (Maharashtra, Karnataka, Kerala, Gujarat, Rajasthan, Uttar Pradesh and others), and while the Re. 1 revenue stamp on receipts is standard practice across India, the article number and the exact treatment of receipts can differ from state to state. E-stamping is neither available nor needed for a Re. 1 receipt — a physical revenue stamp from the post office is the normal route.

Registration

Not registrable, and there is no threshold at which it becomes registrable. A receipt for money is not among the documents listed in section 17 of the Registration Act, 1908, so it can never be compulsorily registered no matter how large the deposit. Do not confuse this with the underlying tenancy: a lease of immovable property from year to year, or for any term exceeding one year, is compulsorily registrable under section 17(1)(d), which in practice means a rent agreement of 12 months or more must be registered. This receipt does not cure a rent agreement that should have been registered and was not.

Notarisation

Not required. A security deposit receipt is valid and fully effective on signature alone. Notarising it adds nothing to its legal standing; its only practical value is an independent record of the date and of who signed, which can help if the landlord later disputes ever having received the money. If the deposit is large, or the parties are strangers to each other, a notarised copy is a cheap comfort — but it is optional, and a bank transfer record does the same job better.

Witnesses

None required by law. A receipt does not need attesting witnesses the way a deed does. Two witness lines are provided because they cost nothing and are genuinely useful in one situation: where the deposit changed hands in cash or in person, a witness who saw the payment is worth having. Where the deposit was paid by bank transfer, the bank record is stronger evidence than any witness and the lines can simply be left blank.