o The Government of India, Ministry of Finance, Department of Revenue has fixed the
stamp duty on transfer of shares at the rate of twenty-five paise (Re. 0.25) for every
hundred rupees (Rs. 100) or part thereof of the value of the shares. (Ref: Article 62(a) of
the Indian Stamp Act 1899)
o This rate of stamp duty is followed by most of the States across India, while some States
have changed it through amendments.
o It is not clarified as to whether the "value of shares" will be taken as per the nominal/ face
value of the shares or the market value of the shares as on the date of execution of transfer
deeds. As per the general practice in most of the companies - the nominal value is taken
for calculation of stamp duty. The stamp act of some of the states has more clear
prescription for it.
o Share transfer in physical mode is executed through "Form SH-4" i.e. the Securities
Transfer Form as prescribed under section 56 of the Companies Act, 2013 read with sub-
rule (1) of rule 11 of the Companies (Share Capital and Debentures) Rules 2014.
Andhra Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
Pradesh rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Andhra
the shares Pradesh Extension and
Amendment) Act, 1959
Arunachal Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
Pradesh rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Arunachal
the shares Pradesh Amendment) Act, 2007
Assam Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Assam
the shares Amendment) Act, 2004
Bihar Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Bihar
the shares Amendment) Act, 1991
Chhattisgarh Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Chhattisgarh
the shares Amendment) Act, 2005
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Goa Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Goa, Daman
the shares and Diu Amendment) Act, 1968
(c) The Indian Stamp (Goa
Amendment) Act 2015
Gujarat Twenty-five paise (Re. 0.25) for every hundred (a) Bombay Stamp (Gujarat
rupees (Rs. 100) or part thereof of the value of Amendment) Act, 2014
the shares
Haryana Fifty paise (Re. 0.50) for every hundred rupees (a) The Indian Stamp Act, 1899
(Rs. 100) or part thereof of the value of the (b) The Indian Stamp (Haryana
shares Amendment ) Act, 1971
Himachal Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
Pradesh rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Himachal
the shares Pradesh Amendment) Act, 1952
Jammu & Twenty-five paise (Re. 0.25) for every hundred (a) The Stamp (Amendment) Act,
Kashmir rupees (Rs. 100) or part thereof of the value of 2011
(J&K) the shares
Jharkhand Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of
the shares
Karnataka Twenty-five paise (Re. 0.25) for every hundred (a) Karnataka Stamp Act, 1957
rupees (Rs. 100) or part thereof of the value of (b) Karnataka Stamp (Amendment)
the shares Act 2015
Kerala Twenty-five paise (Re. 0.25) for every hundred (a) The Kerala Stamp Act, 1959
rupees (Rs. 100) or part thereof of the value of
the shares
Madhya Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
Pradesh rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Madhya
the shares Pradesh Amendment) Act, 2014
Maharashtra Twenty-five paise (Re. 0.25) for every hundred (a) Maharashtra Stamp Act, 1958
rupees (Rs. 100) or part thereof of the value of (b) Maharashtra Stamp
the shares (Amendment) Act, 2015
Manipur Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of
the shares
Meghalaya Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Meghalaya
the shares Amendment) Act, 1993
Mizoram Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Mizoram
the shares Amendment) Amending Act, 1996
Nagaland Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Nagaland
the shares Amendment), 1989
Odisha Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
(Orissa) rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Orissa
the shares Amendment) Act, 2001
Punjab Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Punjab
the shares Amendment ) Act, 2005
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Rajasthan Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Rajasthan Stamp Act, 1998
the shares
Sikkim Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of
the shares
Tamil Nadu Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) Tamil Nadu Stamp Act, 2013
the shares
Telangana Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Andhra
the shares Pradesh Extension and
Amendment) Act, 1959
Tripura Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of
the shares
Uttar Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
Pradesh rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Uttar
the shares Pradesh Amendment) Act, 1997
Uttarakhand Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (Uttarakhand
the shares Amendment ) Act, 2002
West Bengal Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act, 1899
rupees (Rs. 100) or part thereof of the value of (b) The Indian Stamp (West Bengal
the shares Amendment) Act, 1987
Andaman and Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act,
Nicobar Islands rupees (Rs. 100) or part thereof of the value of 1899
the shares
Chandigarh Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act,
rupees (Rs. 100) or part thereof of the value of 1899
the shares
Dadra and Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act,
Nagar Haveli rupees (Rs. 100) or part thereof of the value of 1899
the shares
Daman and Diu Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act,
rupees (Rs. 100) or part thereof of the value of 1899
the shares (b) The Indian Stamp (Goa,
Daman and Diu Amendment)
Act, 1968
National Capital Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp (Delhi
Territory of Delhi rupees (Rs. 100) or part thereof of the value of Amendment) Act, 2001
(NCT of Delhi) the shares
Lakshadweep Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act,
rupees (Rs. 100) or part thereof of the value of 1899
the shares
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Puducherry Twenty-five paise (Re. 0.25) for every hundred (a) The Indian Stamp Act,
(Pondicherry) rupees (Rs. 100) or part thereof of the value of 1899
the shares
Post receipt of shares by way of gift - the receiver of shares will be required to follow the
procedure of transfer. This will attract stamp duty as applicable.
o This is one of the biggest advantages of holding & maintaining shares in demat form.
o Clause (c) of Section 8A of the Indian Stamp Act, 1899 reads as follows: "(c) the transfer
of - (i) registered ownership of securities from a person to a depository or from a depository
to a beneficial owner; (ii) beneficial ownership of securities, dealt with by a depository; (iii)
beneficial ownership of units, such units being units of a Mutual Fund including units of the
Unit Trust of India established under subsection (1) of Section 3 of the Unit Trust of India
Act, 1963 (52 of 1963), dealt with by a depository, shall not be liable to duty under this Act
or any other law for the time being in force."
In case of transmission of shares (i.e. transfer of shares by operation of law post death) -
stamp duty is not required to be paid.
Conversion of single holding into joint holding or joint holding into single holding amounts to
change in ownership of shares and therefore will amount to transfer of shares.
Shareholders will therefore be required to follow the procedure of transfer which will attract
stamp duty.
Though the stamp act is not clear on this aspect - ordinarily the "Transferor" of shares pays
the stamp duty. The transferor and transferee can specify in the agreement as to who will
be liable to pay the stamp duty. (Ref: Section 29 of the Indian Stamp Act 1899)
Stamp duty can be paid by use of adhesive stamps (Ref: Section 11 of the Indian Stamp
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Act 1899). Generally these stamps are affixed to the transfer deed and cancelled (to avoid
repeated use). In case the transfer deed fall short of space in affixing the stamps - another
sheet can be annexed where the stamps can be affixed and cancelled.
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