Stamp duty payable on share certificate

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Smita Katake (Querist)
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17 January 2011 As per the Companies when a company increases its share capital,it pays stampduty to Government.

When company makes allotment of share out of the increasedshare capital and issue share certificates to allotees and pays stampduty on share certificate.

My question is that when the company has already paid stampduty on its share capital at the time of increasing or incorporation,
so why should it pay stamp duty on share certificates of shares issued out of the same capital for which duty has already been paid??

Is there any answer, caselaw,book which will solved the question ?

CS Taher

CS Taher (Expert)
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17 January 2011 Stamp duty is one type of tax levied by the goverment on different legal documents.

While increasing the Authorised Capital the stamp duty is levied by the goverment on the company increasing Auth Capital, whereas in case of allotment the stamp duty is levied on the bearer of share certificates not on the company.

Stamp duty on increase in Auth Capital and on share certificate are both different aspects therefore assuming that you are paying double tax on shares is out of purview of any provision of Income tax Act.

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