FORM NO. 406

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Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2010 FOR WHAT PURPOSE FORM NO. 406 IS USED?
WHAT BENEFIT OF FORM NO. 406. IN MAHARASHTRA.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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20 July 2010 please mention, under which state act you are asking for?

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Asha Kanta Sharma

Asha Kanta Sharma

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25 July 2024 Form No. 406 is used for the purpose of transfer of shares in Maharashtra, specifically under the Maharashtra Stamp Act, 1958. Here are the key aspects and benefits associated with Form No. 406:

### Purpose of Form No. 406:
Form No. 406 is used to pay stamp duty on the transfer of shares of a company registered in Maharashtra. It is required under Section 29 of the Maharashtra Stamp Act, 1958, which mandates that stamp duty must be paid on any transfer of shares.

### Benefits of Form No. 406:

1. **Legal Compliance**: It ensures compliance with the stamp duty provisions related to share transfers in Maharashtra.

2. **Facilitates Share Transfer**: It facilitates the legal transfer of shares from one party to another within the state of Maharashtra.

3. **Stamp Duty Payment**: By submitting Form No. 406 and paying the applicable stamp duty, the transfer of shares becomes legally valid and enforceable.

4. **Avoids Penalties**: Filing Form No. 406 helps in avoiding penalties or legal consequences that may arise from non-payment or underpayment of stamp duty on share transfers.

### Procedure for Using Form No. 406:

- **Preparation**: The form should be filled out accurately with details of the transfer of shares, including the names and addresses of the transferor and transferee, details of the shares being transferred, consideration paid (if any), and other required particulars.

- **Stamp Duty Payment**: The stamp duty payable is calculated based on the value of consideration for the transfer or as per the prescribed rates under the Maharashtra Stamp Act.

- **Submission**: Once the form is filled and signed by both parties (transferor and transferee), it should be submitted to the concerned authorities along with the payment of stamp duty.

- **Registration**: After payment and submission, the authorities will process the form, verify the details, and upon satisfaction, will endorse the form as proof of payment of stamp duty.

In essence, Form No. 406 is crucial for ensuring that the transfer of shares in Maharashtra is legally compliant with stamp duty requirements. It provides clarity and legal validity to the transaction, thereby protecting the interests of both parties involved in the share transfer process.

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