Difference between original stamp duty and additional dutyt

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Querist : Anonymous

Querist : Anonymous (Querist)

25 September 2013 what is the difference between original stamp duty and additional (differential)stamp duty under mca stamp duty pay procedure?
which can be best for pvt company registration?
please solve this problem.?

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2013 please answer me my problem......

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2024 In the context of stamp duty related to company registration in India, particularly under the MCA (Ministry of Corporate Affairs) stamp duty payment procedure, here's an explanation of the terms "original stamp duty" and "additional (differential) stamp duty":

### Original Stamp Duty:

- **Definition:** Original stamp duty refers to the basic stamp duty that is payable at the time of registering a document or transaction. In the case of company registration, it pertains to the stamp duty payable on the memorandum of association (MOA) and articles of association (AOA) of the company.

- **Applicability:** Every company incorporated in India needs to pay stamp duty on its MOA and AOA as per the respective state's Stamp Act. The amount of original stamp duty depends on factors such as the state of incorporation and the authorized capital of the company.

### Additional (Differential) Stamp Duty:

- **Definition:** Additional or differential stamp duty refers to any extra stamp duty that may be required to be paid if there is a difference between the value declared and the value assessed by the stamp duty authorities. This can occur if the authorities determine that the declared value (such as the authorized capital) is undervalued compared to market standards or other relevant benchmarks.

- **Reason for Payment:** It arises when there is a discrepancy or perceived undervaluation in the amount declared for the stamp duty calculation. The stamp duty authorities may assess the document and demand payment of additional duty to cover the shortfall.

### Best Approach for Pvt Company Registration:

- **Prevention:** To avoid complications and delays in the registration process, it is advisable to accurately calculate and declare the authorized capital and other relevant details in the MOA and AOA at the time of company incorporation.

- **Consultation:** Seek guidance from a qualified professional, such as a company secretary or legal advisor, to ensure compliance with the stamp duty regulations specific to the state of incorporation. They can assist in determining the correct amount of stamp duty payable and help navigate any issues related to differential stamp duty.

### Summary:

- **Original stamp duty** is the basic duty payable on documents like MOA and AOA during company registration.
- **Additional or differential stamp duty** may be required if there is an undervaluation or discrepancy identified by the stamp duty authorities.
- **Best Approach:** Ensure accurate declaration of details and seek professional advice to mitigate risks related to differential stamp duty.

By following these guidelines and ensuring compliance with stamp duty regulations, Pvt Company registration can proceed smoothly without unexpected liabilities related to stamp duty payments.

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