Come April 2008 and Delhi will become the first state in the country to do away with printed "stamp paper", which is currently mandatory for property-related documentation.
Instead, people will have to pay the required fees to the state treasury, which in turn will generate a number that will be attached to the document. The number will validate the document, which will be printed on normal paper.
"This system will replace printed stamp paper for immoveable property transactions," said a senior Delhi government official.
However, the new system will not apply to judicial stamp paper used in sworn affidavits and other documents used in legal matters and proceedings.
Although Gujarat and Maharashtra have started pilot projects on doing away with printed stamp paper, Delhi will be the first state where the system will be implemented in one go.
"As Delhi is a single administrative unit, there is no need for a pilot project," the official added.
Stock Holding Corporation of India Ltd will help implement the system in the state.
Stamp paper is compulsory for property-related documents like sale or title deeds or when property is leased or gifted. It is also used for deeds for will adoption, trust, partnerships, General and Special Powers of Attorney or cancellations.
Delhi is expected to derive roughly 11 per cent (around Rs 1,350 crore) of its tax revenues in 2007-08 from stamp duty on transfer of immovable property and this has risen sharply owing to a sharp rise in property prices and reduced duty rates (inclusive of corporation duty) to 4 per cent and 6 per cent for titles registered by women and men respectively.
The move comes nearly a dozen years after police filed the first case against Abdul Karim Telgi for printing and selling fake stamp papers in several states including Maharashtra and Karnataka.
Convicted last year, Telgi master-minded an operation that saw state governments being cheated of thousands of crores of revenues that they would have otherwise earned from selling stamp paper and stamps.
The scam was possible as Telgi managed to procure special printing presses from a government-owned press at Nasik.
The scandal raised questions about the need for a more foolproof system that does not rely on stamp paper.