Promissory Note Generator
A valid pro note with its receipt — and a refusal of notes the law does not allow.
Checks
Preview
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For general information only, not legal advice. Templates are generic starting points — have a qualified lawyer review anything you rely on.
About the Promissory Note Generator
Enter the maker (the borrower — one person or two, jointly and severally), the payee (the lender), the amount, and whether it is payable on demand or on a fixed date, with or without interest. The generator writes the promissory note with the amount in figures and words, the place and date, “for value received” with the payment reference, signature lines for the maker across the revenue stamp and two witnesses — plus a matching receipt in which the maker acknowledges the money, and, when the loan is repaid, a receipt of repayment for the payee to sign.
It checks the essentials of a promissory note under s.4 of the Negotiable Instruments Act — a written, unconditional promise to pay a certain sum to a certain person — and refuses notes payable to bearer, which only the Reserve Bank of India or the Central Government may issue (RBI Act s.31). It also works out the due date with the three days of grace, the 3-year time limit to sue, and explains why stamp duty on promissory notes is fixed by Parliament rather than the States.
How to use it
- Enter the maker — add a second maker for a joint note — and the payee.
- Fill in the amount, the place and date, and choose on demand or on a fixed date; tick interest and enter the yearly rate if it carries interest.
- Choose payable to the payee or order (transferable by endorsement) or to the payee only. Add how and when the money was paid.
- Keep the receipt ticked so the maker also acknowledges the money; tick receipt of repayment when the loan is paid back.
- Read the Checks, download DOCX or PDF, print, affix the revenue stamp and have the maker sign across it in front of two witnesses.
Examples
Maker: Arjun Krishnan · payee: Priya Raman · Rs. 50,000 · on demand · 9% a year · paid by NEFT on 15 October 2026
“On demand, I, Arjun Krishnan … promise to pay Priya Raman … or order, the sum of Rs. 50,000/- (Rupees Fifty Thousand Only), together with interest at 9% per annum from the date of this note until payment, for value received by bank transfer on 15 October 2026 …”
Checks: sue within 3 years of the date of the note (Limitation Act Art. 35), by 15 October 2029.
Payable on 15 April 2027
Due with the three days of grace on 18 April 2027 — a Sunday, so on Saturday 17 April 2027 (NI Act ss.22, 25).
“Payable to bearer” · or an extra line such as “payable only after my marriage”
Error: no person other than the RBI or the Central Government may issue a note payable to bearer (RBI Act s.31(2)); a conditional promise is not a promissory note (NI Act s.4).
Common uses
- Lending money to a friend, relative or colleague and taking a simple written promise to repay.
- Adding a promissory note to a loan agreement as a short, separate instrument.
- Recording the repayment of an old pro note with a receipt that cancels it.
- Checking whether a note someone has asked you to sign is valid and properly worded.
What makes a valid promissory note
A promissory note is “an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument” (Negotiable Instruments Act 1881, s.4). The Act’s own illustrations show the line: “I promise to pay B or order Rs. 500” is a note; “I promise to pay B Rs. 500 seven days after my marriage with C” and “I promise to pay B Rs. 500 and all other sums which shall be due to him” are not — one is conditional, the other uncertain. A sum stays certain even with future interest (s.5).
The tool writes the promise without conditions, puts the amount in figures and words, names the payee, and blocks any extra line that adds a condition.
Why bearer notes are refused
Section 31 of the Reserve Bank of India Act 1934 says no person other than the Bank, or the Central Government where the Act authorises it, may make or issue a promissory note payable to bearer on demand (s.31(1)) — and, whatever the NI Act says, any promissory note expressed to be payable to the bearer (s.31(2)). A private note must therefore name the payee. “Payable to the payee or order” lets the payee endorse it to someone else; “to the payee only” prohibits transfer, so it is not negotiable (NI Act s.13).
Due date, interest and presumptions
- A note with no time for payment is payable on demand (s.19).
- A note payable on a date is at maturity on the third day after that date — the days of grace (s.22); if that day is a Sunday or other public holiday, it falls due on the preceding business day (s.25).
- If the note states no rate of interest, interest on the amount due runs at 18% a year from the date it ought to have been paid (s.80).
- Until the contrary is proved, a court presumes that a negotiable instrument was made for consideration and on the date it bears (s.118) — one reason lenders take a note.
- A material alteration after signing makes the note void against a party who did not consent (s.87): if something must change, write a fresh note.
Stamp duty: set by Parliament, not the States
Unlike most documents, the rates of stamp duty on promissory notes and receipts are fixed by Parliament: they are in entry 91 of the Union List (Constitution of India, Seventh Schedule), while the States set rates for other documents (State List entry 63). Article 49 of Schedule I to the Indian Stamp Act 1899 fixes a duty of less than one rupee for a note payable on demand, and for any other note the same duty as a bill of exchange of that amount and term (Article 13). A receipt for more than Rs. 5,000 is also stamped (Article 53). Anyone who uses an adhesive stamp must cancel it by writing their name or initials across it with the date (s.12); an unstamped instrument can be admitted in evidence only on payment of the duty and a penalty (s.35).
One trap: a note payable to the payee only (not “or order”) that is attested by witnesses also fits the Act’s definition of a bond — an attested instrument, not payable to order or bearer, by which a person binds himself to pay money (s.2(5)(b)) — and an instrument within two descriptions pays the higher duty (s.6). The default “or order” wording avoids that, and the checks warn you if you change it.
Time limit to sue
Three years (Limitation Act 1963, Schedule): for a note payable on demand, from the date of the note (Art. 35); for a note payable at a fixed time, from when it falls due (Art. 31); instalment notes have their own rules (Arts. 36, 37). A written acknowledgment of the debt, or a part-payment acknowledged in writing, before the period ends starts a fresh three years (ss.18, 19). The checks give the date for your note.
Signing
Sign on paper: negotiable instruments, including promissory notes, are excluded from electronic signatures (Information Technology Act 2000, First Schedule, item 1), except a cheque, or a demand promissory note or bill of exchange issued in favour of, or endorsed by, an entity regulated by the RBI, SEBI, IRDAI, PFRDA or NHB. The NI Act does not require witnesses, but two witnesses who saw the maker sign make the signature easier to prove. Loans of Rs. 20,000 or more must be given and repaid through a bank, not in cash (Income-tax Act, 2025, ss.185, 188).
Sources
- Negotiable Instruments Act 1881 — ss.4, 5, 13, 19, 22–25, 80, 87, 118
- Reserve Bank of India Act 1934 — s.31
- Constitution of India — Seventh Schedule, List I entry 91, List II entry 63
- Indian Stamp Act 1899 — ss.2(5), 6, 11, 12, 35; Schedule I Arts. 13, 49, 53
- Limitation Act 1963 — ss.18, 19; Schedule Arts. 31, 35–37
- Information Technology Act 2000 — First Schedule, item 1 (S.O. 4720(E))
- Income-tax Act, 2025 — ss.185, 188
Limitations
- A generic template, not legal advice. Instalment notes, notes for business finance and notes in favour of banks or NBFCs are not covered.
- The stamp duty figure is not calculated; use the stamp your bank, stamp vendor or treasury confirms for the amount and term.
- Public holidays other than Sundays are not checked when working out the due date.
- The first DOCX or PDF download needs a connection to load the document engine; Copy and Print work offline.
Privacy
Everything happens in your browser. Names, addresses, amounts and payment references are not uploaded or stored by MySmartCoPilot. If you tick Keep a draft in this browser, the form is saved in this browser’s local storage until you untick it.
Frequently asked questions
Is a promissory note legally valid without a lawyer or notary?
Yes. A promissory note needs no notary or registration: it must be in writing, an unconditional promise signed by the maker, to pay a certain sum to a certain person (NI Act s.4), and it must be stamped. Witnesses are optional but helpful.
How much stamp duty is payable on a promissory note?
The rate is fixed by Parliament under the Indian Stamp Act (Schedule I, Article 49), not by your State: less than one rupee for a note payable on demand, and the bill-of-exchange rate for notes payable at a later date. Cancel an adhesive stamp by signing across it with the date.
Can I make a promissory note payable to bearer?
No. Only the Reserve Bank of India, or the Central Government where the RBI Act allows, may make or issue a promissory note expressed to be payable to bearer (RBI Act s.31). A private note must name the payee; “or order” lets the payee endorse it.
How long is a promissory note valid?
The note itself does not expire, but a suit on it must be brought within three years: from the date of the note if it is payable on demand (Limitation Act Art. 35), or from the due date if it is payable on a fixed date (Art. 31). A written acknowledgment or a part-payment acknowledged in writing before then restarts the period.
What interest applies if the note does not mention any?
If no rate is specified, the NI Act applies interest at 18% a year on the amount due from the date it ought to have been paid until payment (s.80).
Can a promissory note be signed online?
Generally no. Negotiable instruments are excluded from electronic signatures by the IT Act’s First Schedule; the exceptions are cheques and demand promissory notes or bills of exchange issued in favour of, or endorsed by, entities regulated by the RBI, SEBI, IRDAI, PFRDA or NHB.