Stamping of Shares & Debentures
What is share stamping?
(SH-1) are required to be stamped within 30 days from the date of issue. Stamp duty is a tax imposed on certain documents, including share certificates, to validate them legally. The stamp duty should be paid and the certificate properly stamped within the specified time period.
What is debenture stamping?
Debenture being a marketable security transferable by endorsement or by a special instrument of instrument the rate of stamp duty is 0.37% of the value of the security. In case debenture being marketable security transferable by delivery the stamp duty applicable is 0.75% of the value of the security
Why we pay stamp duty/ Charging Section?
As per Section 3 of the Indian Stamp Act, 1899, every instrument specified in the Schedule-1 subject to other provision of the Act, shall be chargeable to stamp duty subject to following conditions
- Every Instrument executed in India after the year 1899.
- Bill of Exchange (other than those payable on demand) and Promissory Note drawn or made out of India and accepted or paid, presented for acceptance or payment, or endorsed, transferred or otherwise negotiated in India.
- Every instrument other than Bill of Exchange and Promissory Note mentioned in the schedule is executed out of India relates to any property situated or to any matter or thing is done or to be done in India and is received in India.
Provided that no duty shall be chargeable in respect of-
- Any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
- Another exemption is related to the Merchant Shipping Act, 1894.
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