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stamp duty on share certificate

Basavaraju.B.R.Gowda ( Student) (186 Points)

06 January 2011

what is the stamp duty payable on share certificate.the consideration is Rs. 50000/-

and where to get it stamped?

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8 Replies

Jaideep (Service) (1368 Points)
Replied 06 January 2011

Hi,

Stamp duty will depend on state where the registered office of the company is situated, for e.g. if it is in maharashtra stamp duty will be Rs.1 for the share certificate of Rs 1000. (0.1%), In the state of AP it is adhoc Rs.1 for every share certificate.

Stamp duty will be payable by affixing Revenue Stamp of the share certificate and embosing common seal of the company on the same.

Regards

Jaideep Pandya

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Raman (CS) (33 Points)
Replied 06 January 2011

Refer to Tndian Stamps Act, 1899 and State schedule therein

Sudhir Garg (Service) (236 Points)
Replied 06 January 2011

Dear Gowda

Mr Jaideep is correct. But I wish to add one more thing that place (state) of board meeting in which allotment was made also determines rate of stamp duty. Mr Jai is requested to confirm the same if myself is right.

Regards/Sudhir

Jaideep (Service) (1368 Points)
Replied 07 January 2011

Hi Sudhir,

In my view place of Board resolution will not affect in case of issue of shares. As shares are the instrument created by company while board is a mediator through which company acts. As such, stamp duty will be as per state of registered office of the Company.

Regards

Jaideep Pandya

Sudhir Garg (Service) (236 Points)
Replied 07 January 2011

Thanks Jai

With due regard to your response, wish to highlight that whenever two companies (of different state of regd offices) signs any agreement / contract in another (third) state, then stamp act of that third state is applicable. Means to say, that Place of signing of contract is basic factor while deciding stamp duty.

Likewise, in case of stamp duty on share certificate, place of signing of share certificate is important (providing you are having enough evidences to support). However, company may resort to show isuance of share certificate from that state where stamp duty is less. But to be on safer side, board meeting is considered important as deciding factor for stamp duty on share certificates (Please note any lone alone BM for allotment of shares may be viewed as tax evasion action). Please confirm my understanding.

Regards / Sudhir

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(Guest)

Sudhir,

You are right stamp duty is paid in the state in which board meeing for allotment of shares is held.

This issue has nothing to do with state of registered office of company.

(Guest)

Sudhir,

You are right stamp duty is paid in the state in which board meeing for allotment of shares is held.

This issue has nothing to do with state of registered office of company.

Harish (CS) (92 Points)
Replied 09 May 2012

Dear Learned Members, Is anything mentioned in any act relating to the state in which the stamp duty on share certificates is payable.Means if there is any clarification required how do we satisfy the department.