A share certificate is a certificate given to the shareholder of the company in the form SH-1. Share certificate being an instrument requires stamping and Stamp duty on share certificate is a state-related matter where delay in payment of stamp duty appeals penalty.

Firstly, Stamp duty on share certificate has to be paid at the time of incorporation, and afterward on every subsequent shares allotment.

A share certificate is a printed signed document that depicts legal proof of ownership of the number of shares specified in that certificate

Stamp Duty

Time Limit For Issuance Of Share Certificate

Section 56(4) of the Companies Act, 2013 read with rules, contains the provisions related to time limits for issuance of share certificate

Sl No. Particulars Time period
1 In case of subscriber Within 2 months from the date of incorporation
2 In case of Subsequent allotment

Time Limit For Payment Of Stamp Duty On Share Certificate

Section 32 of the Indian Stamp Act, 1899, said that

Event Time period
Date of issue of share certificate one month from the date of its execution

Jurisdiction For Stamp Duty Payment

The stamp duty must be paid, preferably, where the registered office of the company is situated

Duty Payable On Stamping Of Shares

Rs. 1/- for every Rs. 1000/- or part thereof of the value of the share including the amount of premium.

Here value of the shares means:

As per Section 21 of Indian Stamp Act,

Stamp duty will be paid on the issue price not on the face value. (e.g. in case of issue of security at premium, the stamp duty is payable on the issue price and not on face value of security.

*Stamp duty on share certificate is State subject, so its vary state to state.

Process Duration related to Stamp Duty Payment on Shares

Once all the required documents submitted on the portal, then

  • after 1-2 weeks the challan shall be generated
  • Pay the Stamp Duty amount using Net Banking/Debit Card/ Cash/ NEFT/ RTGS.
  • Print the acknowledgement and
  • collect the e-Stamp Certificate from the nearest branch of Stockholding in Delhi by producing the printed acknowledgement at the counter.
  • Upload the Scan copy of e-stamp Certificate
  • After scrutiny and patching of e-Stamp Certificate, the Certificate of payment of stamp duty shall be issued and
  • Certificate can be downloaded from the status menu online.

So, within in a month process of stamping will be complete.

Further in case of delay

Once all the required documents submitted on the portal, then

  • Reference number will be generated after submission.
  • The request initiated status can be seen in the status column.
  • Now, the hearing date shall be shown in the status column after 1-2 weeks or shall be provided via email or if not received within the specified time please contact to the Collector of Stamp, NCT of Delhi.
  • In hearing with SDM, the penalty shall be levied up to 10 times of duty. The Penalty shall depend on justification of the Professional authorized for the same.
  • The challan shall be generated within 1-2 week of hearing.

Consequence Of Non Payment Of Stamp Duty

In case of non-payment of stamp duty or evasion of payment of stamp duty on the issue of share certificate in case of allotment of share, the company shall be liable for heavy penalty under the Act, which may extend to 10 times of the duty.

Documents Required for Payment of Stamp Duty on Shares

In case of shares are issued to the shareholders at the time of incorporation-

  • Signed share certificate
  • Company COI, MOA, and AOA
  • Form PAS 3 along with Payment Receipt filed to ROC (in case of additional allotment)
  • List of subscribers/ List of allottees
  • Board resolution of shares allotment to the subscribers
  • Board resolution to issue share certificate and authorization for stamp duty payment
  • List of Directors
  • Certificate of Practicing Professional to whom the power is given to pay Stamp duty

*All the required documents will be in pdf format and digitally signed by an authorized person.

**The company shall pay the stamp duty through the SHCIL e-stamp website link by online mode.

Author Bio

Qualification: CS
Company: GAMISH ADVISORS LLP
Location: New Delhi, New Delhi, IN
Member Since: 07 Sep 2020 | Total Posts: 3

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2 Comments

  1. Thamizhvanan says:

    Dear Goyal. I am a PCS in Chennai. I have incorporated last week on private Ltd with subscribed capital of Rs.1,00,000. Today Company allots Equity shares of face value Rs.4,00,000.All are physical shares.
    1.What is stamp duty payable for subscribed capital and the present allotment.I understand as per latest amendment the Stampdulty payable is @.005% and what is stated in your Article.Kindly clarify.
    2. Mode of payment of duty also I am told that only collection agent only has to be approched. The Company can not pay online.
    Kindly clarify
    Thanks in Advance
    Thamizhvanan
    2.

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