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Delhi-based companies are required to pay a stamp duty of 0.1 per cent on the issuance of shares, clarified the revenue department. The stamp collector has instructed NSDL and CDSL not to collect the lower central rate of 0.005 per cent, confirming that the correct rate under Schedule IA of the Indian Stamp Act, 1899, applies. All listed and unlisted companies must apply for adjudication of stamp duty, whether issuing physical or digital share certificates. Non-compliance can attract penalties and interest, and delays affect Delhi's state revenue collection.
Companies with registered offices in Delhi are required to pay a stamp duty of 0.1 per cent of the value of shares issued, according to officials. The Delhi stamp collector has instructed the depositories NSDL and CDSL not to collect the stamp duty applicable to Delhi when processing share issuance, emphasizing that the correct rate under Delhi law must be followed. Advertisement
The revenue department has set up a mechanism through Stock Holding Corporation of India Ltd (SHCIL) for the payment of stamp duty on share certificates. Companies can make the payment via SHCIL's portal, after which certificates confirming payment are issued by the stamp collector's office.
In a recent circular, the Delhi revenue department clarified that stamp duty on share issuance by companies registered in Delhi is chargeable under Schedule IA of the Indian Stamp Act, 1899. Under Schedule IA, with certain amendments specific to the National Capital Territory (NCT) of Delhi, Article 19 prescribes a rate of 0.1 per cent of the value of shares.
All listed and unlisted companies with registered offices in Delhi have been directed to apply for adjudication of stamp duty for share issuance, regardless of whether the certificates are physical or digital (DEMAT) form. The circular emphasizes that this is a statutory requirement under the applicable state stamp acts.
Officials pointed out that the primary depositories NSDL and CDSL have been applying a lower rate of 0.005 per cent in line with the central Indian Stamp Act, 1899. However, the Delhi government clarified that this lower rate is not authorised for companies incorporated or having registered offices in Delhi. A letter issued last month by the stamp collector specifically highlighted that CDSL has not provided any authorization to collect the lower rate on behalf of the Delhi government.
The revenue department also warned that failure to comply with the stamp duty rules can attract penalties and interest under the Stamp Act, 1899. Delays in payment not only violate statutory requirements but also result in financial losses to the state exchequer, as stamp duty constitutes an important source of revenue for the government.
Source PTI
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