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Stamp duty records preservation - years??

27 March 2015

Dear All,

Please advise what is the required in terms of number of years for which we should preserve the records for payment of stamp duty on share certificates. I have noticed that Collector of Stamps have been sending notices to all the companies in general asking them to provide stamp duty payment proofs since their incorporation.

This is not practially possible for a company which is 20 years old or more at least. It will also be totally unjustified if the authority then asks a company to go for compounding because of not presenting the payment proof to them for (let's say) first 3 or 4 years of its incorporation.

Please advise if you have any view on numbers of years for which the records for payment of stamp duty on share certificate should be preserved.

regards

Deepak

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P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 15 April 2015

Stamp duty on share certificates is governed by respective State laws. Hence you have to refer to your State law for the same. However, seeking such information is not a good practice. Onus of proving that duly has not been paid is on the department. Stamp duty is paid on an instrument. Department should produce share certificate on which duty has not been paid and then seek clarification from the company. Even for compounding the share certificate is required. Share certificate is issued to the shareholders. Proof of payment of stamp duty will be found only in concerned voucher forming part of books of account for which retention period is 8 years. From that supporting also it cannot be proved that duty has in fact been paid on those specific share certificates only. I think you should reply to the notice suitably through some lawyer.