Stamp duty - allotment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 December 2014 Whether we have to pay stamp duty on allotment of shares directly in Demat Form?

In my opinion, we do not need to pay but FAQ's on NSDL website says yes.

Please clarify

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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26 December 2014 yes you have to pay stamp duty on shares allotted in demat mode

Querist : Anonymous

Querist : Anonymous (Querist)

26 December 2014 any reference to this plz?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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25 July 2025 Hey! About stamp duty on shares allotted directly in **demat form** — yes, stamp duty **is payable** even if shares are issued in dematerialized form.

### Why?

* The **stamp duty liability** arises on the **instrument of allotment or share transfer**, regardless of whether shares are in physical or demat form.
* The **NSDL FAQ** confirms that stamp duty applies on share allotment in demat form.

### Legal/Regulatory references:

* **Stamp Act (state-wise)**: Stamp duty is payable on share transfer and share allotment instruments as per the applicable state law.
* **Section 6 of the Indian Stamp Act, 1899** (and relevant state amendments) impose duty on share certificates or instruments representing shares.
* **NSDL FAQs** mention that for shares allotted in dematerialized form, the duty is to be paid on the transaction and the custodians/registrars handle it as part of the process.

### Summary:

* Even for **allotment directly in demat**, stamp duty **cannot be waived**.
* The duty is usually charged on the market value or face value of shares allotted.
* It’s common practice that the issuer or registrar deducts or collects the stamp duty during the demat allotment process.

If you want, I can share you specific state Stamp Act provisions or NSDL links for official FAQs. Would that help?

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