Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor respectively, that is to say—
(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in India on or after the first day of July, 1899;
(b) every bill of exchange payable otherwise than on demand, or promissory note drawn or made out of India on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in India; and
(c) every instrument (other than a bill of exchange or promissory note) mentioned in that Schedule, which, not having been previously executed by any person, is executed out of India on or after that day, relates to any property situate, or to any matter or thing done or to be done, in India and is received in India:
Provided that no duty shall be chargeable in respect of any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument.
Legal Commentary & Landmark Judgments: Section 3
Section 3 of the Indian Stamp Act, 1899 constitutes the fundamental charging section of the statute, specifying the instruments that are chargeable with stamp duty.
Under Section 3, stamp duty is a tax on the *instrument* itself, not on the underlying oral transaction or market bargain. If parties conclude a transaction orally without executing a written instrument, no stamp duty is attracted. Once committed to writing and signed, liability attaches immediately under Section 3.