Navigating Share Stamp Duty in India: A Concise Guide for Investors and Companies

"Ensure seamless financial transactions. Understanding Share Stamp Duty is key to compliance and growth."

Introduction: The Essentials of Share Stamp Duty

In India's financial landscape, Share Stamp Duty is a crucial tax on securities transactions. Whether you're an investor or a company, understanding this duty is vital for compliance and smooth operations.

This guide simplifies share stamp duty in India, covering its latest rates, calculation, and compliance requirements for both investors and companies.

What is Share Stamp Duty?

Stamp duty is a government tax on financial and legal documents, including share transfers and issuances. It ensures transaction validity and generates revenue. India's uniform stamp duty regime, effective July 1, 2020, centralized its collection, simplifying the process.

Key Aspects of Share Stamp Duty in India

1. Uniformity and Centralization

Since July 2020, the Finance Act, 2019, ensures a uniform stamp duty rate across India for securities transactions. Stock exchanges and depositories collect the duty, remitting it to state governments.

2. Applicable Scenarios

Share stamp duty applies to:

• Issuance of Shares: New shares, physical or dematerialized.

• Transfer of Shares: Existing shares, whether listed (via exchanges) or unlisted (off-market).

• Other Securities: Includes debentures, mutual fund units, and other marketable securities.

3. Current Rates of Share Stamp Duty (as of 2025)

Rates vary by transaction type:

• Issuance of Shares: 0.005% of market value.

• Transfer of Listed Shares (Delivery-Based): 0.015% of transaction value (auto-deducted).

• Transfer of Unlisted Shares: 0.015% of transaction value (manual payment).

• Physical Shares: 0.015% of total market value.

Note: Always refer to the latest official notifications for any state-specific nuances.

How is Share Stamp Duty Calculated and Paid?

For Issuance of Shares:

Calculated on the market value (issue price) of shares.

Example: INR 1,00,000 shares * 0.005% = INR 5 stamp duty.

For Transfer of Shares:

• Listed Shares (Demat): Automatically collected by exchanges; buyer pays.

• Unlisted Shares (Demat): Paid by buyer via depository participants or online portals.

• Physical Shares: Paid via adhesive stamps or franking on the transfer deed.

Compliance and Penalties

Non-compliance can lead to fines, interest, and legal invalidation of transactions. Timely and accurate payment is crucial. Companies are responsible for issuance duty, while transferees typically handle transfer duty.

Conclusion: Simplify Your Financial Compliance with Expert Guidance

Understanding and complying with share stamp duty is vital for anyone in the Indian securities market. While uniformity has reduced complexity, precision is still key.

For comprehensive support in navigating share stamp duty, ensuring compliance, and optimizing your financial transactions, Dugain Advisors is your trusted partner. Connect with us today to ensure seamless compliance and strategic financial planning.