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Stamp duty

NIRAJ GOEL (PROP.) (107 Points)

27 April 2012

Dear Friends

When shares are transferred without any consideration, still we require to pay any stamp duty.

As stamp duty is on consideration

plz guide

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2 Replies

CA Sripal Jain (Associate Finance) (709 Points)
Replied 27 April 2012

If you do not give any consideration for a transfer no Stamp Duty is not payable. Some examples include:

shares that you receive as a gift and that you don't pay anything for (either money or some other consideration)
shares that your spouse or civil partner transfers to you when you marry or enter into a civil partnership
shares held in trust that are transferred from one trustee to another
transfers that a liquidator makes as settlement to shareholders when a business is wound up
shares transferred to you as security for a loan
shares held as security for a loan that are transferred back to you when you repay the loan
transfer to the beneficiaries of a trust when the trust is being wound up

regards

sripal jain

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G S Rao (Deputy General Manager) (5669 Points)
Replied 29 April 2012

Section 21 of the Stamp Act states that where an instrument is chargeable with ad valorem duty in respect of any stock or of any marketable or other security, such duty must be calculated on the value of such stock or security according to the average price of the value thereof on the day of the date of instrument. Therefore even if the consideration is nil, still stamp duty is pavayble @ 0.25 paise for every one hundred rupees or part there of of market value or consideration whichever is higher.

However there is a concession in stamp duty, if the transfer is from trustee to trustee or trustee to beneficiary without consideration. Each state prescribes different duties in this regard.The relevant article in the Indian stamp act is article 62. It clearly stipulates stamp duty is payable whether with or without consideration. Share transfer adhesive stamps are to be affixed on the transfer deed.Nowadays franking is done.on payment.

Gsrao