Stamp duty on share allotment

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P.C. Joshi (Querist)
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25 November 2011 Dear Friends,

Now a days we come to know that collecter of stamps in Delhi and other states are issuing notices to companies for default in payment of stamp duty in share certfcate on allotment of shares. Some of you must have come across thi sissue recently. I have some queries in this repect can any one please clarify.

1. WE PAY STAMP DUTY WHILE INCORPORATING A COMPANY AND ALSO WHILE INCREASING THE AUTHORISED CAPITAL. Then what else is the stamp duty payable on allotment.

2. If yes it is payable what is the rate and how the stamping is done i mean is it a self adhesive stamps or embossed on the share certifcate and the systems woks.

3.What is the option for the companies who have viloted this norm.
4. Suppose a company sou moto wants to comply with the stamp duty payment for past as well as future cases what should it do. WHich office in Delhi should be contacted.

5. I understand that in Haryana there is a stamp duty of Rs 10/- irrespective of quantum/amunt of shars capital issued. SO some company are showing the palce of allotment/board meeting in haryana is it valid.

6. In case any notice has been receibved what reply should be given at the first instance.

Looking forward to plenty of responses on this matter.

Thanks & Regards

P.C. Joshi
B.Com, ACS, LLB
Mobile- 09891702927

Srirang Mahabhagwat

Srirang Mahabhagwat (Expert)
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25 November 2011
Dear Member,
1. The stamp Duty is not paid in respect of allotment of shares but on issue off share certificates subsequent to allotment. Hence its payable.
2. The stamp duty is paid according to the provisions of relevant stamp acts of the state.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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25 July 2025 This is a common and important issue faced by many companies related to stamp duty on share allotment and share certificates. Let me address your queries one by one:

1. Do we pay stamp duty on allotment after paying at incorporation and authorized capital increase?
Yes, stamp duty is payable on share allotment (i.e., when shares are actually issued to shareholders), separate from duty paid on incorporation or authorized capital increase.

Stamp duty at incorporation/authorized capital is for the Memorandum and Articles of Association.

Stamp duty on share allotment is for the share certificates issued to shareholders.

2. What is the rate and mode of payment of stamp duty on share allotment?
Stamp duty rates vary from state to state, typically ranging from ₹1 to ₹5 per share certificate or a fixed percentage of share capital value.

For example, Delhi stamp duty is usually ₹1 per share certificate, irrespective of value.

In Haryana, Rs 10 per share certificate is charged, regardless of amount.

The stamping is generally done by affixing adhesive stamp papers or using franking machines. Embossing is not mandatory.

Some states allow self-adhesive stamps, but companies generally get certificates stamped at the Sub-Registrar’s Office or Stamp Office.

3. What options are available for companies that violated this norm?
Companies that have not paid stamp duty on allotment can:

Voluntarily pay the due stamp duty along with penalty and interest, if applicable.

Submit a declaration and payment receipt to the relevant Stamp Department.

Some states provide amnesty schemes for past defaults.

It’s advisable to take legal advice and comply promptly to avoid prosecution.

4. How should a company comply for past and future cases? Which office to contact in Delhi?
Contact the Office of the Chief Controlling Revenue Authority (CCRA) or the Stamp Duty Office in Delhi.

File an application for payment of outstanding stamp duty, along with required documents (share certificates, board resolution, etc.).

For future cases, establish an internal system to stamp share certificates immediately on allotment.

Some companies also use professional stamp vendors or franking services for efficient processing.

5. Validity of showing Haryana as place of allotment for lower stamp duty?
Using Haryana as the place of allotment just to save stamp duty may not be legally valid.

Stamp duty is levied based on the place of execution or place of business of the company, not merely on the place mentioned on documents.

Such practices can be challenged by the authorities and may attract penalties.

6. How to reply on receiving a notice for default in stamp duty?
Acknowledge the notice promptly.

Submit a reply mentioning:

The company’s intention to comply.

Any steps already taken to pay stamp duty.

Request for details of amount payable.

Arrange for payment of stamp duty along with penalty to resolve the issue.

It is good to consult a legal or tax professional before replying.

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