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Stamp Duty On the Share Certificates to be issued to Promote

Priti Harishchandra Naik (Compliance Executive - Secretarial) (30 Points)

25 July 2011

I have incorporated a Pvt. Ltd Company nd now wants to isssue Share Certificates to the Promoters, Do these Certificates required Stamping or Franking? or it is needed only in case of Share Transfers?

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8 Replies

kamal kishor sen (STUDENT Rajasthan) (2156 Points)
Replied 25 July 2011

As per my knowledge stamping is need only at the time of shares transfer.

wait for expert's opinion

Ankit Patniya (Assistant Company Secretary) (124 Points)
Replied 29 July 2011

Dear all,

In case of issuance of share certifiacate the revenue stamp of Rs 0.50 is require for every Rs. 100/- so you have to adher revenue stam of whatever amount calculate as above. if it is not posible to adher huge no. of stamp ticket you have to apply to suppretendent of stamp to pass order of payment of consolidated stam duty on issueing certificate.

According to me there is no provision to pay stamp duty on certifiacate with the mode of franking because it will go in the pocket of state govenment and company have to pay stamp to cental govenment to so franking may not the proper for stamping share certificat.

I am not sure about frenking if i am wrong please tell be so i can clear my concept.

Thanks.

Priti Harishchandra Naik (Compliance Executive - Secretarial) (30 Points)
Replied 29 July 2011

Thanks guys for replying!but I will be thankful if Ankur Sir replies on this issue.

Regards,

Priti Naik

CS Smriti Sharma (ACS, B Samrish & Co.) (880 Points)
Replied 29 July 2011

Dear Priti,

Yes stamping is compulsory. As per Section 3 of Indian Stamps Act 1899,which is adopted by the state stamp Acts, "Every share certificate must bear the necessary stamp duty as per the stamp Act of the respective state/ union territory from which certificate is issued ". The rates of stamp duty can be obtained with reference to relevant article of given state Act. For e.g. in Delhi article 19 prescribes stamp duty @ Re 1 for every Rs 1000 or part thereof.

Thanks & Regards

Smriti Sharma

B. Samrish & Co.

Company Secretaries

www.bsamrishindia.com

Priti Harishchandra Naik (Compliance Executive - Secretarial) (30 Points)
Replied 29 July 2011

Thanks Smriti..thanks alot!

Regards,

Priti Naik

Vrinda Aghi (Legal Associate) (463 Points)
Replied 02 November 2011

There is no stamp duty as such on share certificates, only share transfer attracts stamp duty at 0.25% of the consideration amount.

Please note Share Purchase Agreements attracts the duty mentioned above by CS Smriti

Shridhi Jain (Company Secretary) (1678 Points)
Replied 03 November 2011

Smriti is right.

Revenue stamp is to b pasted on share certificates at the rate of Re.1 stamp for every Rs.1000 value of shares

(Guest)

RATE OF STAMP DUTY ON SHARE CERTIFICATES

S.no.	States	Rate of duty
1.	Andhra Pradesh	Thirty Paise
2.	Arunachal Pradesh	Rs. 5.00
3.	Haryana	Forty Naye paise
4.	Himachal Pradesh	Forty Paise
5.	Karnataka	One rupee for every one thousand rupees or a part thereof of the value of the share, scrip or stock.
6..	Kerala	Fifty Paise
7.	Maharashtra	Re. 1 for every Rs. 1,000 or part
8.	Manipur	AS of Assam
9.	Nagaland	Forty Five Paise
10.	Orissa	One rupee
11.	Punjab	Ten Rupees [40 n.p. under act 34 of 1960 and 25 n.p. prior thereto
12.	Rajasthan	One rupee for every one thousand or a part thereof of the value of the shares, scrip or stock
13.	Tripura	As of Assam
14.	Uttar Pradesh	One Rupee
15.	National Capital Territory of Delhi	One rupee for every one thousand or a part thereof of the value of the shares, scrip or stock