Query - Stamp duty on allotment of securities in demat form
JOSHI THOMAS
srikanth reddy
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With Regards
Srikanth Reddy Kolli
Company Secretary
+91 9618144661
veena iyer
For demat form of securities, no stamp duty is payable.
Rgds
CS Veena Iyer |
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CS.M.Alagar
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Venkat Ram
Dear Thomas,
Stamp Duty is not exempted for allotment of securities to Depositories. As per provisions of the Indian Stamp Act, 1899 Section 8A, an issuer, by the issue of securities to one or more depositories shall, in respect of such issue, be chargeable with duty on the total amount of security issued by it and such securities need not be stamped;
It is evident that Stamp Duty is payable on allotment of shares to the Depositories and what the Act says is that the Securities shall not be stamped, which is obvious given the fact that they are electronic securities. Almost all the Companies allotting shares (Demat or Physical) prefer to allot it in a Board Meeting held in a state where Stamp Duty incidence on allotment of shares is very less or nil.
What is exempt from Stamp Duty is transfer of beneficial ownership pursuant to Section 8A (d).
Section 8A is given under for your reference:
8A. Securities not liable to stamp duty
Notwithstanding anything contained in this Act,-
(a) an issuer, by the issue of securities to one or more depositories shall, in respect of such issue, be chargeable with duty on the total amount of security issued by it and such securities need not be stamped;
(b) where an issuer issues certificate of security under sub-section (3) of section 14 of the Depositories Act, 1996, on such certificate duty shall be payable as is payable on the issue of duplicate certificate under this Act;
(c) transfer of registered ownership of share from a person to a depository or from a depository to a beneficial owner shall not be liable to any stamp duty;
(d) transfer of beneficial ownership of shares, such shares being shares of a company formed and registered under the Companies Act, 1956 or a body corporate established by a Central Act dealt with by a depository, shall not be liable to duty under article 62 of Schedule I of this Act;
(e) transfer of beneficial ownership of units, such units being units of a mutual fund including units of the Unit Trust of India established under sub-section (1) of section 3 of the Unit Trust of India Act, 1963 dealt with by a depository, shall not be liable to duty under article 62 of Schedule I of this Act.]
Explanation: For the purposes of this section, the expressions "beneficial owner", "depository" and "issuer", shall have the meanings respectively assigned to them in clauses (a), (e) and (f) of sub-section (1) of section 2 of the Depositories Act, 1996.]
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Nishant Bajaj
Yes, the Issuer has to pay the relevant stamp duty as applicable irrespective whether it is issued in either physical or demat form. As per the Finance Act 2000, stamp duty is waived only for transfers within the depository.
Pls visit below mentioned link
https://nsdl.co.in/debtinst/faqsondebt.php
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NISHANT BAJAJ
C.S, L.L.B. (GEN)
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Sundaram Venkateswaran
Yes, the Issuer has to pay the relevant stamp duty as applicable irrespective whether it is issued in either physical or demat form. As per the Finance Act 2000, stamp duty is waived only for transfers within the depository.
Br
Venkat
Ven...@danfoss.com
From: csch...@googlegroups.com [mailto:csch...@googlegroups.com] On Behalf Of JOSHI THOMAS
Sent: 14 February 2011 14:04
To: csch...@googlegroups.com
Subject: Re: (CSchennai) Query - Stamp duty on allotment of securities in demat form
