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Is Stamp duty to be made on Share Certificate?


Is Stamp duty to be made on Share Certificate?, This article would be explaining you about the requirements regarding the stamp duty to be paid to the authorities in case of the share certificates to be issued to the share holders. There has been much confusion regarding the same, so this article would clarify the same. It would also clarify you about the payments to be made within what time limit and consequences for not paying the same, what rate to be made in different states. I have taken the example of the DELHI and explained whole article. Now you can scroll down below n check more details regarding “Is Stamp duty to be made on Share Certificate?”

Is Stamp duty to be made on Share Certificate?

Is Stamp duty to be made on Share Certificate

Procedure for getting the stamp duty in Delhi:

1. Firstly the company who wants to allot shares would be allotting to the share holders. Company will have to give the share certificate to the share holders within a time period of 60 days from the date of allotment of shares.

2. After the share certificate is issued within the prescribed time period then the documents need to be submitted to the government within 30 days from the date of issuance of certificate. The document list is described here:

  • List of Shareholders
  • List of Existing Directors
  • Original Share Certificate
  • Adjudication fee of Rs 10 to the department
  • Covering letter
  • Certified copy of Form 2 with challan
  • Certified copy of MOA and AOA.

3. Then the government will prepare a duty chart within the 15 to 20 days from the date of submission of documents, duty chart will contain Name of the Company, Address, Face value, Date of issue, etc.

4. After the duty chart is prepared the government would give the challan to be paid by the company in the specified banks and the company has to pay within 5 to 6 days that amount of stamp duty.

5. After the challan is paid, the copy of the challan has to be deposited to the revenue department, after the challan is received by the revenue department they will issue the certificate of the stamp duty paid.

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Important Issues:

  1. There are many questions regarding the stamp duty to be paid when there is issue of duplicate or share split, the answer to that frequently asked question is yes. But in the Act it is clearly mentioned that the maximum amount to be charged in case of the issue of shares is Re. One. So we need to take the stamp duty paid for Re. 1 only.
  2. The question will also arise that whether the stamp duty will be paid in case of the transfer of shares from one person to other. The answer to it is No. No stamp duty will be required in case of transfer of shares.
  3. In case of share certificate to be issued in dematerialized form, then also the stamp duty would be required to be paid.
  4. The question also arises that at what amount the stamp duty is to be paid. The stamp duty is to be paid on the amount totaling to face value and premium. The rates for the stamp duty vary from state to state.
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About Yash Shah

Yash Shah is passionate article writer and has written more than 100 articles in the field of Finance, Insurance, Stock Market, Company Law, Auditing, Taxation and many others. In case of any queries or suggestions, you can reach the author @ [email protected], you can also catch him on facebook @ yashshah299

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