Stamp duty

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09 January 2010 How much stamp duty will payable on share transfer.
whether stamp duty is payable in case of pvt ltd company in which share is transferred by one member to new menber

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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09 January 2010 The share transfer deed should be duly stamped. Presently, the stamp duty payable is @ 25 Ps per Rs 100 of consideration (and not on basis of face value of shares). [As per Article 62 of Schedule I to Indian Stamp Act, the stamp duty payable on transfer is 75 Paise per Rs 100 or part thereof of 'value of shares'. The stamp duty has been reduced to 25 Ps per Rs 100 w.e.f. 1-3-2004, vide notification No. S.O. 130(E) dated 28-1-2004. Earlier, upto 29-2-04, it was 50 Ps per Rs 100 or part thereof, vide notification No. SO 198(E) dated 16.3.1976]. There is no stamp duty on transfer of shares or debentures in a depository scheme.
As per section 21, the duty has to be calculated on the basis of market price prevalent on date of instrument and not on the face value of shares - UOI v. Kulu Valley Transport Ltd. - (1958) 28 Comp. Cas. 29. Note that only adhesive stamps marked as 'Share Transfer' are permitted. Thus, other ordinary adhesive stamps (usually termed as 'revenue stamps') cannot be used for share transfer. (Rule 17 of Stamp Rules)

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