Company Law

PAYMENT OF STAMP DUTY IN DELHI ON SHARE CERTIFICATES

PAYMENT OF STAMP DUTY IN DELHI ON SHARE CERTIFICATES

DEFINITIONS:-

Stamp Duty:-. Stamp duty is a duty levied on the legal recognition to pay amount of tax on certain documents/instruments.

Share Certificates:-Share certificate is a certificate given to the holder of equity shares of the company in form SH-1. A share certificate is a signed written document that serves as legal proof of ownership of the number of shares indicated in that certificate. The Companies Act, 2013 has prescribed the events along with time period within which company have to issue share certificates.

STAMP DUTY PAYMENT IN DELHI AS PER SECTION 3 OF THE INDIAN STAMP ACT, 1899

As per section 3 of the Indian Stamp Act, 1899 every instrument mentioned in the schedule is chargeable with the proper duty.

In Delhi stamp duty payable on the share certificates is Rs. 1/- for every Rs. 1000 or part thereof of the value of the shares or stocks including the amount of premium. Every company is required to pay stamp duty on the value of shares or stocks via online mode within the period of 30 days from the date of issue of share certificates.

CONSEQUENCES OF NON PAYMENT OF STAMP DUTY:-

If a company failed to pay stamp duty within prescribed period of thirty days then: –

  • Company has to attend hearing on the date that would be given by the concern department/authority and;
  • Shall have to pay penalty impose by the authority along with stamp duty.

ISSUE OF SHARE CERTIFICATES

Section 56(4) of the Companies Act, 2013 contains the time period within which company shall issue share certificates after incorporation and allotment:-

S.No Particulars Time period
1. In case of issue of shares to the subscribers of Memorandum of Association at the time of Incorporation. Within the period of 2 month from the date of Incorporation
2. In case of allotment of shares after incorporation Within the period of 1 month from the date of allotment

Let see few examples:-

  1. XYZ Pvt. Ltd company limited by shares, incorporated on 01st April, 2019. Issued 10,000 equity shares of Rs. 10 each to the subscribers of Memorandum of Association and issued share certificates to the subscribers on 15th May, 2019. What would be duty company have to pay if company submitted application online for payment of duty on 13th June, 2019?

In Delhi stamp duty payable on the share certificates is Rs. 1/- for every Rs. 1000 or part thereof of the value of the shares or stocks including the amount of premium.

The Company has submitted application on 13th June, 2019 i.e within the period of 30 days from the date of issue of share certificates.

Value of shares:-1,00,000 (10,000*10)

Stamp duty: –   Value of shares/1000

:-  1,00,000/1000

:- 100/- is stamp duty

  1. ABC Pvt. Ltd company limited by shares, incorporated on 01st April, 2019. Issued 10,000 equity shares of Rs. 10 each to the subscribers of Memorandum of Association and issued share certificates to the subscribers on 15th May, 2019. What would be duty company have to pay if company submitted application online for payment of duty on 17th June, 2019?

The Company has submitted application on 17th June, 2019 i.e after the period of 30 days from the date of issue of share certificates. Therefore, in this case company has to first attend the hearing and

Shall pay Rs. 100/- stamp duty along with the penalty imposed by the concern department/authority.

  1. DEF Pvt. Ltd Company limited by shares has made allotment of 20,000 equity shares of Rs. 10/-each and at premium of Rs. 5/- per share on 01st May, 2019 and issued share certificates to allottees on 27th May, 2019. What would be duty company have to pay if company submitted application online for payment of duty on 18th June, 2019?

Value of shares

Face value of Rs. 10 each   – 20,000*10= 2,00,000

Premium of Rs. 5 each       – 20,000*5  = 1,00,000

Total          = 3,00,000

Stamp duty: –   Value of shares/1000

                      :- 3,00,000/1000

:- 300 is stamp duty

LIST OF THE DOCUMENTS REQUIRED FOR STAMPING:-

S.No In case of issue of shares to the subscribers at the time of incorporation In case of allotment of shares after incorporation
1. Signed share certificates Signed share certificates
2. Certificate of Incorporation (COI) Certificate of Incorporation (COI)
3. Memorandum of Association(MOA) Memorandum of Association (MOA)
4. Article of Association (AOA) Article of Association (AOA)
5. List of subscribers List of allottees
6. Board resolution of allotment of shares to the subscribers Board resolution of allotment of shares to the allottees
7. Board Resolution of issuance of share certificate and authorization for the payment of stamp duty Board Resolution of issuance of share certificate and authorization for the payment of stamp duty
8. List of Directors List of Directors
9. Certificate of Practicing Professional to whom the authority is given for paying Stamp duty. Certificate of Practicing Professional to whom the authority is given for paying Stamp duty.
10. Certificate of previous stamp duty paid, if any

 

 

With Best Regards,

CS Aarti Kumari

Aarti and Associates

Company secretaries

secretarialpro@yahoo.com

+91- 7428522985

Have any Question or Comment?

10 comments on “PAYMENT OF STAMP DUTY IN DELHI ON SHARE CERTIFICATES

Rinku Rohilla

Very Nice

Reply
Savita

where to pay stamp duty on Debentures of a Private Company in Delhi.

Reply
admin

Dear Savita,

Stamp Duty Rate on issue and Transfer of Debenture certificate
In case of issue and transfer of Debenture Certificate, in case of issue, stamp duty @0.005% would be payable and in case of Transfer, stamp duty @0.0001% would be payable. Since transfer of debenture is the Central Matter hence same rate will be applicable all over India.

Further, the stamp duty can be paid through relevant adhesive stamp, which are available at indian post offices. In case of any query or help, feel free to contact at +91-7428522985 (CS Aarti Kumari) or Email at secretarialpro@yahoo.com.

https://secretarialpro.com/2238-2/

Reply
Deepak

What is the stamp duty in Haryana for transfer of shares of an unlisted Company?

Reply
admin

Hi Deepak,

Please find below link for article which you are looking for:-

Stamp Duty rates on share certificate and other securities.

Further, for more information,

Kindly feel free to reach us.

Regards,
CS Aarti Kumari
secretarialpro@yahoo.com
+91-7428522985

Reply
Jaspreet Kaur

There was article where it was specified that stamp duty rate on share certificates is made uniform 0.005%
Can you give a clarity for same .

Reply
admin

Hi Jaspreet,

Please find below link for article which you are looking for:-

Stamp Duty rates on share certificate and other securities.

Further, for more information,

Kindly feel free to reach us.

Regards,
CS Aarti Kumari
secretarialpro@yahoo.com
+91-7428522985

Reply
Anita Rikhadi

Hi, Can adhesive stamp available in Indian Post office will work for share certificates? Further what to do if 30 days have already been passed after issue of share certificates?

Reply
admin

Hello Anita,

Stamp duty on issue of Share Certificate is state government matter and process of paying stamp duty will very state to state. Please inform us state in which share certificate were issued.

Like in Delhi, if 30 days time period expired, penalty upto 10 time of stamp duty payable chargeable against delay.

For more details, please contact Ms. Aarti at +91-7428522985.

Reply
Deepak singla

Any specific section in delhi stamo act, paymeny penality
1to 10 time…on payble duty.

Reply

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