In order to facilitate ease of doing business and to bring in uniformity of the stamp duty on securities across States the Government of India amended the Indian Stamp Act 1899. The revised Act has come into effect from July 1, 2020.
Today we will discuss some important features of this amended act.
Main Features:
1. Now, the Stamp Duty shall be collected only by one agency on behalf of the state government.
2. Collection agencies are: Stock Exchange or Clearing Corporations of India Limited (CCIL) or by the Depositories only.
3. Stamp Duty shall be levied according to buyer’s location.
4. Collection agencies shall transfer the collected stamp duty to State Government within 3 weeks from each month end.
5. Collecting agencies shall transfer the collected stamp duty in the account of concerned State Government with the Reserve Bank of India or any scheduled commercial bank.
6. Before transfer collection agencies will deduct 0.2% towards facilitation charges from total stamp duty collected.
7. State Government shall appoint a nodal officer for all official communications for the collection of stamp duty.
8. If collection agencies are failed to transfer stamp duty within 3 weeks, then the fine would be not less than Rs. 1 lakh but which may extend up to one percent of the collection or transfer so defaulted.
9. Stamp duty shall be levied only when the consideration is involved. If the consideration is nil, no stamp duty shall be levied. For example: in the case of issue of bonus shares, transfer of shares by way of gift, the stamp duty shall not be levied.
10. In case of share issue, transfer, sale and purchase, or any creation or initial issue of securities or change in the record of depository or any secondary market transactions, stamp duty shall be levied by the concerned depositories.
11. Amended Act applies to derivative, a certificate of deposit, commercial bills, commercial paper as used by companies, and repo on corporate bonds.
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