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What is Franking: Know All About Its Charges, Services and More

Author
Blox Social
Posted on
May 16, 2023
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While most real estate buyers and investors have heard about stamp duty, many are still unaware of the ‘franking' process directly associated with it.

Simply put, franking is the process of stamping a document with a special machine to indicate that the stamp duty has been paid. As you might already know, stamp duty is a tax levied by the government on various legal documents such as property deeds, agreements, contracts, etc. Franking is one of the methods of paying stamp duty besides using adhesive stamps or e-stamping. 

Let us learn more about franking, from offline to online franking services in Mumbai, their charges, and more.

  • Inside the Franking Process

Franking machines are available at authorised banks and institutions with a government license to provide franking services. The machines print a mark on the document with the date, amount of stamp duty paid, and a unique identification number. The franked document can then be used as a valid proof of payment of stamp duty.

Franking charges are the fees authorised banks and institutions charge for providing franking services. The charges vary depending on the type and value of the document and the state where the document is executed. For example, in Maharashtra, the franking charges are 0.1% of the value of the document, subject to a minimum of INR 20 and a maximum of INR 20,000.

  • Offline and Online Franking Services in Mumbai

Today, online franking services in Mumbai allow users to pay stamp duty online and get their documents franked electronically. Online franking is available only in Maharashtra through the website of Stock Holding Corporation of India Limited (SHCIL), the central agency for e-stamping in India. Users can register on the website, upload their documents, pay stamp duty through net banking or debit/credit cards, and get their documents franked with a digital signature and a barcode.

On the other hand, offline franking is a service that requires users to physically visit an authorised bank or institution and get their documents franked manually. Users have to fill up an application form, submit their documents, pay stamp duty in cash or cheque, and get their documents stamped by the franking machine.

Franking services in Mumbai are offered by various banks and institutions that have a license from the government to provide franking services. 

Why is Franking Important?

Franking is a convenient and secure way of paying stamp duty and avoiding delays and disputes in the registration of documents. However, users should be aware of the rules and regulations regarding franking in their respective states and follow them accordingly. 

Here are some of the benefits of franking:

  • It proves that the stamp duty has been paid

As mentioned above, franking is a way to prove that the appropriate stamp duty has been paid on a document. This is important because it helps ensure the document is legitimate and that the government has received the appropriate revenue.

  • It can help to prevent fraud

Franking can help to prevent fraud by making it more difficult to create fake documents. When a document is franked, it is stamped with a unique identifier, making it difficult to forge. This helps to ensure that the document is genuine and cannot be used for fraud.

  • It can help to speed up the processing of documents

When a document is franked, government agencies typically process it more quickly. This is because the franking process provides proof that the stamp duty has been paid, eliminating the agency's need to verify this information.

Conclusion

Overall, franking is an important process that helps to ensure the legitimacy of documents and to prevent fraud. It is a simple process that can be done by anyone, and it is a valuable way to protect your interests.

Finance & Legal