“Receipts” includes any note, memorandum or writing—
- whereby any money, or any bill of exchange, cheque or promissory note is acknowledged to have been received, or
- by any other movable property is acknowledged to have been received in satisfaction of a debt, or
- whereby any debt or demand, or any part of a debt or demand, is acknowledged to have been satisfied or discharged, or
- which signifies or imports any such acknowledgment,
and whether the same is or is not signed with the name of any person;
The term receipt is defined in section 2 clause 23 of the Indian Stamp Act, 1899. Any person receiving any money exceeding Rs. 20/- or any bill of exchange, cheque or promissory note for an amounts exceeding Rs. 20/- or receiving in satisfaction or part satisfaction of a debt any movable property exceeding Rs 20 in value, shall, on demand by the person, paying or delivering such money, bill, cheque, note of property, give a dully stamped received for the same.
Generally, it is the receipt or acknowledgement which is the bone of contention for any financial disputes. Giving or receiving receipts or acknowledgement for any kind of transactions makes you legally safe. It also curves the litigation as the probability and possibility of the dispute is reduce to minimum.
Indian stamp Act provides the list of instruments which must bear the stamp of appropriate value. The penalties have also been contemplated under law if the due procedure is not fulfill.
Registration of receipts is not compulsory, but if a receipt by itself creates an interest in immovable property of the value of Rs. 100/- and upwards, its registration will be compulsory.
Importance of receipts
Receipts serve as a document for customer payments and as a record of sale. If you want to provide a customer with a receipt, you can handwrite one on a piece of paper or create one digitally using a template or software system. If you plan on doing business, it’s important that you know how to properly write a receipt for proper documentation, tax purposes, and to protect yourself and your customers.
To issue a receipt
It is advisable for a business to issue some form of receipt to all customers. This is supply whenever a customer pays for goods or services offer by a business. A receipt could be simply signing and dating an invoice to show that it has been paid.
A receipt is also important documentation for maintaining your business records and preparing your tax returns, so it is vital you keep copies of these filed away safely.
Information to put on a receipt
If you sell a product or service the receipt you provide to your customer should contain the following:
- your company’s details including name, address, phone number and/or email address
- the date of transaction showing date, month and year
- a list of products or services showing a brief description of the product and quantity sold
- the amount of the transaction with the total amount broken down down to show the net amount, VAT (if VAT has been added) and any discounts
- the method of payment – ie cash, credit or debit card etc.
Issue a receipt
There are various ways a receipt can be issue. A receipt can be issue on paper or electronically. It can be handwritten or type.
Many small cash registers contain built-in printers for producing receipts. They also have software that allows you to programme tax rates and codes straight into the register, so all the calculations are done automatically.
Also, digital receipts are an option – this method of supplying a receipt is becoming increasing more popular. Once produced, the receipt is email straight to the customer. This website offers a range of templates for customising.
If you don’t have software to produce a digital receipt, then a handwritten receipt will work just as well. A receipt book can be purchase easily from a stationers and usually offers two copies per receipt (one for the customer, the other for your records). Alternatively, there are plenty of receipt templates available online that you can download to use or you can create your own template from scratch, in Microsoft Word for example.
Do I need to keep a copy of all receipts?
It is advisable to keep records of all receipts for the same length of time as other business documents are retained (which is a minimum of six years).
Obligation to give receipt in certain cases
Any person receiving any money, exceeding twenty rupees in amount, or any bill of exchange, cheque or promissory note for an amount exceeding twenty rupees, or receiving in satisfaction or part satisfaction of a debt any movable property exceeding twenty rupees in value, shall, on demand by the person paying or delivering such money, bill, cheque, note or property, give a duly stamped receipt for the same.
[Any person receiving or taking credit for any premium or consideration for any renewal of any contract of fire-insurance, shall, within one month after receiving or taking credit for such premium or consideration, give a duly stamped receipt for the same.]
Key Differences Between Invoice and Receipt
- An Invoice is a request for payment and receipt is a confirmation of payment.
- The significant difference between the two is that the invoice is issue prior to the payment while the receipt is issue after the payment.
- The invoice is use to track the sale of goods or services. On the contrary, receipt acts as documentation for the buyer that the amount of the merchandise has been paid.
- The invoice indicates the total amount due whereas the receipt indicates the total sum paid along with the mode of payment.
Definition of Invoice
An invoice is an acknowledgement issue by the vendor to the purchaser of goods or services to request for the payment of goods sold or services rendered by him. It is a non-negotiable legal document which identifies the buyer and seller of the stuff. It contains details regarding quantity, price, discount, taxes, the total amount due for the payment, invoice number, date of issue of invoice and the seller’s signature. The instrument is deliver prior to the payment of the goods for indicating the amount due against the merchandise.
Definition of Receipt
A receipt is a commercial legal instrument use for stating that some goods or services of value have been received. It is issue by the vendor to the purchaser to act as proof that payment has been make. The receipt is issue after the payment of the stuff. The document contains details of buyer and commodity like quantity, price, taxes, discounts, mode and date of payment, the total amount paid, receipt number and signature of the seller or his authorised agent.