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Gift of shares

Mamta Batra (CS) (376 Points)

17 July 2009

If the shares are transferred by way of gift then whether the stamp duty is required to be paid or not?

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2 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 19 July 2009

Yes, as per Article 62(a) of Indian Stamp Act 1899, duty is payable @ 25 paise for every Rs.100 or part thereof of the value of the shares. Hence even if consideration is NIL, stamp duty is payable.

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Ajay Mishra (Company Secretary) (74337 Points)
Replied 20 July 2009

Dear Ms. Mamta

AMOUNT (ENTRY 62, SCHEDULE I, OF INDIAN STAMP ACT, 1899)

The Government has prescribed a stamp duty of, Rs.0.25 for every hundred rupees (100 RS.) or part thereof the value of the share, i.e. the price at which shares were brought (commission price), and not the face value of shares under transfer.

Violation of this provision will attract penal provisions to the company, under stamp Act.

In case of gift of shares there is a necessity to mention the consideration as the shares are being transferred free of consideration. However, stamp duty thereon will have to be paid on the basis of the market value of the shares on the date of the gift.

Regards