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Stamp Duty on "Transfer or Transmission of Shares/Securities" Statewise in India

Stamp Duty On Transfer Of Shares Under Indian Stamp Act
  • The Government of India, Ministry of Finance, Department of Revenue has fixed the stamp duty on transfer of shares at the rate of twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares.  (Ref: Article 62(a) of the Indian Stamp Act 1899)
  • This rate of stamp duty is followed by most of the States across India, while some States have changed it through amendments.
  • It is not clarified as to whether the "value of shares" will be taken as per the nominal/ face value of the shares or the market value of the shares as on the date of execution of transfer deeds. As per the general practice in most of the companies - the nominal value is taken for calculation of stamp duty. The stamp act of some of the states has more clear prescription for it.
  • Share transfer in physical mode is executed through "Form SH-4" i.e. the Securities Transfer Form as prescribed under section 56 of the Companies Act, 2013 read with sub-rule (1) of rule 11 of the Companies (Share Capital and Debentures) Rules 2014.
RATES OF STAMP DUTY ON TRANSFER OF SHARES STATEWISE IN INDIA

State

Rate of Stamp Duty

Applicable Law

Reference

Andhra Pradesh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Andhra   Pradesh Extension and Amendment) Act, 1959

Arunachal Pradesh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Arunachal Pradesh Amendment) Act, 2007

Assam

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Assam Amendment) Act, 2004

Bihar

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Bihar Amendment) Act, 1991


Chhattisgarh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Chhattisgarh Amendment) Act, 2005

Goa

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Goa, Daman and Diu Amendment) Act, 1968

(c) The Indian Stamp (Goa Amendment) Act 2015

Gujarat

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) Bombay Stamp (Gujarat Amendment) Act, 2014

Haryana

Fifty paise (Re. 0.50) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Haryana Amendment ) Act, 1971

Himachal Pradesh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Himachal Pradesh Amendment) Act, 1952


Jammu & Kashmir (J&K)

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Stamp (Amendment) Act, 2011

Jharkhand

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

Karnataka

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) Karnataka Stamp Act, 1957

(b) Karnataka Stamp (Amendment) Act 2015

Kerala

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Kerala Stamp Act, 1959


Madhya Pradesh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Madhya Pradesh Amendment) Act, 2014

Maharashtra

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) Maharashtra Stamp Act,   1958

(b) Maharashtra Stamp (Amendment) Act, 2015

Manipur

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

Meghalaya

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Meghalaya Amendment) Act,   1993

Mizoram

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Mizoram Amendment) Amending Act, 1996


Nagaland

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Nagaland Amendment), 1989

Odisha (Orissa)

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Orissa Amendment) Act, 2001

Punjab

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Punjab   Amendment ) Act, 2005

Rajasthan

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Rajasthan Stamp Act, 1998

Sikkim

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

Tamil Nadu   

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) Tamil Nadu Stamp Act,  2013

Telangana

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Andhra   Pradesh Extension and Amendment) Act, 1959

Tripura

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

Uttar Pradesh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Uttar Pradesh Amendment) Act, 1997



Uttarakhand

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Uttarakhand Amendment ) Act, 2002

West Bengal

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (West Bengal Amendment) Act,   1987



Union Territories

Rate of Stamp Duty

Applicable Law

Reference

Andaman and Nicobar Islands

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899
Chandigarh

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899
Dadra and Nagar   Haveli

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899
Daman and Diu

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

(b) The Indian Stamp (Goa, Daman and Diu Amendment) Act, 1968

National Capital Territory of Delhi (NCT of Delhi)

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp (Delhi Amendment) Act, 2001

Lakshadweep

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899

Puducherry (Pondicherry)

Twenty-five paise (Re. 0.25) for every hundred rupees (Rs. 100) or part thereof of the value of the shares

(a) The Indian Stamp Act, 1899



Stamp Duty On Transfer Of Shares By Way Of Gift / Without Consideration

  • Post receipt of shares by way of gift - the receiver of shares will be required to follow the procedure of transfer. This will attract stamp duty as applicable.

Stamp Duty On Transfer Of Shares In Demat Form

  • NO stamp duty is payable in case of transfer of shares in demat mode.
  • This is one of the biggest advantages of holding & maintaining shares in demat form.
  • Clause (c) of Section 8A of the Indian Stamp Act, 1899 reads as follows: "(c) the transfer of - (i) registered ownership of securities from a person to a depository or from a depository to a beneficial owner; (ii) beneficial ownership of securities, dealt with by a depository; (iii) beneficial ownership of units, such units being units of a Mutual Fund including units of the Unit Trust of India established under subsection (1) of Section 3 of the Unit Trust of India Act, 1963 (52 of 1963), dealt with by a depository, shall not be liable to duty under this Act or any other law for the time being in force."

Stamp Duty On Transfer Of Shares On Death i.e.  Transmission Of Shares

  • In case of transmission of shares (i.e. transfer of shares by operation of law post death) - stamp duty is not required to be paid.
Conversion Of Joint Holding To Single Holding And Vice-a-Versa
  • Conversion of single holding into joint holding or joint holding into single holding amounts to change in ownership of shares and therefore will amount to transfer of shares. Shareholders will therefore be required to follow the procedure of transfer which will attract stamp duty.


WHO WILL PAY THE STAMP DUTY?


Though the stamp act is not clear on this aspect - ordinarily the "Transferor" of shares pays the stamp duty. The transferor and transferee can specify in the agreement as to who will be liable to pay the stamp duty. (Ref: Section 29 of the Indian Stamp Act 1899)


HOW TO PAY THE STAMP DUTY?

Stamp duty can be paid by use of adhesive stamps (Ref: Section 11 of the Indian Stamp Act 1899). Generally these stamps are affixed to the transfer deed and cancelled (to avoid repeated use). In case the transfer deed fall short of space in affixing the stamps - another sheet can be annexed where the stamps can be affixed and cancelled.
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