Section 17 of the Indian Stamp Act, 1899 states that “All instruments chargeable with duty and executed by any person in India shall be stamped before or at the time of execution”. Section 2(14) of the same act defines “Instrument” as “every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded”.Thus, going by the provisions of the Indian Stamp Act, 1899 it can be concluded that it will be legally favourable to choose to pay a rihght amount of Stamp Duty, which differs from state to state, on Employee Agreement to maintain its legal validity.