Applicability of Stamp duty

Dear Friends,

I come across a query from my client in respect to the applicability of stamp duty.

Fact:

The client is a private limited company based in New Delhi and have foreign shareholders.

Could you please let me know in case if anybody practically handled the situation that whether there is a stamp duty applicability in case of given below two situtations:

1. Whether stamp duty would be payable in case of increase in authorised share capital of the private limited company in India? In case your answer is in affirmative, could you please let me know the rate at which the amount would be paid?

2. Whether the stamp duty would be payable on the value of consideration received for the equity shares when issued?

My understanding is that stamp duty would be payable on the nominal value of shares when issued.

Thanks in advance for your valuable suggestion.

Warm Regards,

CA. Divyanshu Agrawal

Replies (4)

Reply to your Q....

1. Whether stamp duty would be payable in case of increase in authorised share capital of the private limited company in India? In case your answer is in affirmative, could you please let me know the rate at which the amount would be paid?

Reply: Stamp duty would be payable for increase in authorized capital. The rate of duty will differ according to the state in which registered office of the company is situated. MCA portal's estamp has a list of stamp duty rate for different states, link of the same is pasted for your ready reference.

https://mca.gov.in/MCA21/dca/eStamp/eStamp_rate.pdf

 2. Whether the stamp duty would be payable on the value of consideration received for the equity shares when issued?

Reply: Stamp duty would be payable on the consideration value which is again differs according to the state where the shares are issued. pls check state rate.

Reg

Randhir

 

Thanks Randhir for your reply.

Could you let me know whether stamp duty would be payable on the face value of the shares or on the market value?

For an example if the face value of the shares is INR 10 and company is issuing at INR 1000 i.e Premium amount is Rs 990.  Then would the stamp duty payable on INR 1000 or on INR 10.

Thanks

The provision for stamp in this case again will differ from state to state, for Ex...in Delhi its like this

 

 

CERTIFICATE OR OTHER DOCUMENT, evidencing the right or title of the holder thereof, or any other person, either to any shares, scrip or stock in or of any incorporated company or other body corporate or to become proprietor of shares, scrip or stock in or of any such company or body. See also LETTER OF ALLOTMENT OFSHARES (No. 36) One rupee for every one thousand or a part thereof of the value of the shares, scrip or stock

In Haryana Its like This

 

Certificate or other document evidencing the right or title of the holder thereof, or any other person, either to any shares, scriptts or stock in or any incorporated company or other body corp orate, or to become proprietor of sh ares, scriptts or stock in or of any such company or body. Forty naye paise.

You need to refer the relevant state's stamp act in your case.

Reg

Randhir

Thank you.

I highly appreciate your timely response.  It is of great help to me.

Warm Regards,

CA. Divyanshu Agrawal 

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