Professional Opportunity
STAMP DUTY
On Share Certificates in Delhi
CA. Rajat Mohan 9910044223
INDEX
 ACT – Introduction to Stamp Duty on Share Certificates
 Procedure
1. Prepare Documents
2. Submission of Documents
3. Preparation of Duty Chart
4. Preparation of Challan
5. Payment of Challan
6. Deposit of Challan
7. Certificate of Stamp Duty paid
8. Examples
 Procedure for Submission of Stamp Duty after expiry of specified period
 Penalty
 FAQ’s
CA. Rajat Mohan 9910044223
ACT
CA. Rajat Mohan 9910044223
ACT
 According to Companies Act, 1956,- “Every person whose name is
entered as a member in the register of members shall be entitled to
receive share certificate within three months after allotment(or
within such other period as the conditions of issue shall provide).”
 According to Indian Stamp Act, 1899, the company shall pay the
stamp duty within thirty days after the Issue of Share Certificate.
 As per Delhi Stamp act, stamp duty shall be paid on “CERTIFICATE OR
OTHER DOCUMENT evidence the right or title of the holder thereof,
or any other person, either to any shares, one thousand stock in or
of any incorporated Co. or other body corporate or to become
proprietor of shares, scrip or stock in or of any such Company or
body.”
CA. Rajat Mohan 9910044223
ACT
Cont…….
 Rate of the said stamp duty shall be “One rupee for every one
thousand, or a part thereof, of the value of the shares, scrip or stock
including the amount of Premium.”
 Penalty shall be 1 to 10 times depending upon the order being
passed by department. However penalty can be lower than 1 time as
decided by authority.
CA. Rajat Mohan 9910044223
Procedure
CA. Rajat Mohan 9910044223
Procedure for Submission of Stamp Duty on time
1. Prepare Documents
At the time of issue of shares, Stamp duty shall be paid to the exchequer of
government within one month from issue of Share Certificates. Following
documents shall be prepared :A) Covering Letter (duly affixed Rs 10/- Court Fee Stamp).
B) List of Existing directors.
C) List of shareholders.
D) Brief information of the company (In Standard Format issued by
Department).
CA. Rajat Mohan 9910044223
E)
Certified Copy of Form-2 with Challan.
F)
Original Share Certificates.
G)
Certified Copy of memorandum & article of association.
H)
Rs 10/- as adjudication fee to be deposited with cashier of the
department.
CA. Rajat Mohan 9910044223
A) Covering letter
Date: dd/mm/yyyy
To
Collector of Stamps,
New Delhi.
Dear Sir,
Sub: Stamping of Share Certificates – Name of the Company
We
are
a
Private
Limited
Company
having
our
registered
office
“_______________________________________________________________________________________”.
at
_______ equity shares of Rs. ___/- each were allotted at premium of Rs ___/- each to ____ Allottees in the Board Meeting
held on dd/mm/yyyy as per details given below:
Name of Allottee
No. of Shares
Distinctive No.
From
A)
B)
C)
CA. Rajat Mohan 9910044223
To
Share
Certificate No.
As per Indian Stamp Act, 1899 (2 of 1899) as amended by Indian Stamp (Delhi Second Amendment) Ordinance, 2001, the Share Certificate is required to be
stamped @ Re. 1 per thousand of the value of shares. Therefore, in the instant case stamping for Rs. _____/- (being 0.1 % of Rs. _______/- ) has to be
got done.
In this connection, we are enclosing herewith the following documents along with Certified Copies of Share Certificates (__ in number):1.
2.
3.
4.
Certified copy of Memorandum and Articles of Association of the Company.
Certified copy of Board Resolution
Photocopy of Share Certificates
Requisite information w.r.t. shares allotted in the prescribed format.
We hope that the above documents are in order to your convenience and perusal and you will be able to issue the necessary order / challan at an early
date.
The Company already issued the Share Certificates only after paying the requisite Consolidated Stamp Duty.
We authorize ____________ (Chartered Accountant) & ___________ (Office Boy) for submitting the letter for stamping of Share Certificates with the
Collector of Stamps, New Delhi and to do all the acts necessary for getting the Share Certificates stamped in all respects whether herein specified or
not, as may be proper and expedient to collect the same.
Yours truly,
For ____________________ PVT. LTD.
___________
(Director)
Encl: As Above
CA. Rajat Mohan 9910044223
B) List of Existing Directors
LIST OF DIRECTORS OF THE COMPANY AS ON dd/mm/yyyy
DIN/PAN
_____________
_____________
Full Name
_____________
_____________
Present residential
address
Designation
Date of Appointment
Director
dd/mm/yyyy
Director
dd/mm/yyyy
_____________
_____________
For _________________ PVT. LTD.
_______________
(Directors)
CA. Rajat Mohan 9910044223
C) List of Share Holders
• List of existing Share Holders should be provided as maintained by
the company.
• In case of listed companies this would be very difficult to provide.
We advice in such cases list of promoters & directors & there
relatives who are shareholders of this company shall be given.
CA. Rajat Mohan 9910044223
D) Brief information of the company
1
Name and Address of the Company
-
2
Brief activity of the company
-
3
Status of the Company
Private Company Limited by Shares, Incorporated on dd/mm/yyyy
vide CIN No.
4
Date of allotment of shares
dd/mm/yyyy
5
Reason of allotment of shares on different dates (if
applicable)
We advice that instead of filling this part, new letter should be
submitted.
6
No. of shares to be issued
-
7
Face value of each share
Rs. _/-
8
Premium to be charged on each share along with
return of allotment filled with ROC
Rs. _/-
9
Distinctive No. of shares
-
For _________________________ PVT. LTD.
_______________
(Directors)
CA. Rajat Mohan 9910044223
E) Form – 2
• Self Attested Following Documents:
1. Form – 2
2. Challan of Form – 2
3. Attachment of Form – 2
(a) List of Allottees
(b) Board Resolution
(C) Any other Attachment, if any
•
In case Share Certificates issued are on incorporation of company, then
Form – 2 is not needed. Your provided MOA & AOA is sufficient for
verification & confirmation of Allotment.
•
Sometimes in case of non-availability of Form – 2 , same may be retrieved
from website of mca.gov.in. Even then if it is not available then give an
affidavit by Directors of the company.
CA. Rajat Mohan 9910044223
F) Share Certificate
ABC PRIVATE LIMITED
(Incorporated under the Companies Act –1956)
Registered office:_________________________________,
________________________
SHARE CERTIFICATE
This is to certify that the person(s) named this Certificate is/are the registered Holder(s) of the within-mentioned Share(s) bearing the distinctive number(s)
herein specified in the above Company subject to the Memorandum and Articles of Association of the Company and that the amount endorsed hereon has
been paid up on each such shares.
EQUITY SHARES EACH OF Rs. 10
Amount Paid up per share Rs. 10
Regd. Folio No. 00X
Certi. No. 00X
Name of the shareholder :
Mr. XYZ
No of shares:
XXX (_____________ Only)
Distinctive No.
From xxx1
To 1 xxx
Given under the Common Seal of the Company this ddth mmm , yyyy
Managing Director
Director
Secretary/ Authorised Signatory
Note : No transfer of any of the Share(s) comprised in this Certificate
willRajat
be registered
unless
accompanied by this Certificate.
CA.
Mohan
9910044223
G) Memorandum & Article of Association
• Certified Copy of Memorandum of Association & Article of
Association is needed with all above documents.
• If there is any change in MOA & AOA then the altered MOA & AOA is
needed.
CA. Rajat Mohan 9910044223
H) Adjudication Fee
• Rs 10/- as adjudication fee to be deposited with cashier of the
department.
• Earlier the amount was Rs. 5/- now the amount is increased to Rs.
10/-
CA. Rajat Mohan 9910044223
2. Submission of Documents
• At the time of issue of shares, Stamp duty shall be paid to the
exchequer of government within specified period. Above discussed
documents shall be prepared & submitted to Revenue Department
(204, B – Block, 5, Sham Nath Marg, Delhi -110054) within One
month of Issue of Share Certificates.
CA. Rajat Mohan 9910044223
3. Preparation of Duty Chart
• Duty Chart is prepared by the department nearly about 15 to 20
days after submission of documents.
• Duty Chart includes Name of the Company , Address of the
Company, Face Value of Shares issued, Premium Charged on Shares,
Date of Issue, etc.
• Format of Duty Chart is on Next Slide.
CA. Rajat Mohan 9910044223
Duty Chart - Format
OFFICE OF THE DIVISIONAL COMMISSIONER, REVENUE DEPARTMENT, STAMP BRANCH 5, SHAM NATH MARG,
DELHI
Sub:
F******* payment of Stamp Duty chargeable on Shares/Debentures etc.
S.No.
Descriptions
Remarks
1
File No. & Date
F. 10 (____)/COS/HQ/CD
2
Reference No. &
Date
F. Audit/Stamp Duty/Shares./10/
3
Name of the
Company
M/s.
4
Address of the
Company
5
Date of allotment of Shares
6
Date of issue of Shares
7
No. Shares
8
Face value of each Shares
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
9
Premium of each shares if
any
Rs.
Rs
Rs.
Rs.
Rs.
Rs.
10
Distinctive no. of Shares
11
Whether proper stamp duty
paid or not?
12
Aggregate amount of Shares
including premium
13
Amount of stamp duty
Dated :
Shares have been executed on _______________________________________________ and submit this office for payment of stamp duty on
__________________________ i.e. within prescribed time limit (Prescribed time limit is within one month
from date of execution).
As discussed, notice issued
CA. Rajat Mohan 9910044223
Submitted please
COS (HO)
4. Preparation of Challan
• Challan has been issued by department in Triplicate on the basis
of Duty Chart Made.
• The same Challan has to be paid at SBI, Tis Hazari, New Delhi
within 5-6 working days for smooth working of your file/case.
• Format of Challan is on Next Slide.
CA. Rajat Mohan 9910044223
Challan - Format
TREASURY/SUB-TREASURY
T.R.6
CHALLAN NO.
:
(G.A.R.7)
Treasury Rule 92
Challan of amount paid into the
BANK
STATE/RESERVE
OF
Name,
(&/or)
designation
and address
of the
person on
whose
behalf the
money is
paid
at ………….
To be filled in by the
Departmental
TO BE FILLED IN BY THE
REMITTER
By
whom
tendered
INDIA
Full
Particulars of
the remittance
and of the
authority (if
any)
Head of
Account
AMOUNT
Rs.
(In words) Rupees …….……………………………………………………………………………….
P.
Officer of the Treasury
Order to the
bank
(To be used only in
Accounts
case
Officer by
of remittance
whom
to the Bank through
adjustable
Departmental
Officer or the
Treasury Officer)
Date……………………….…... Signature of the Tenderer …………………………..
Received payment (in words) Rupees……………………………………………...………
Treasurer
Accountant
Date
CA. Rajat Mohan 9910044223
Treasury Officer/Agent
5. Payment of Challan
• After the preparation of Challan (in triplicate), you have to make
payment of Challan (in triplicate) in Sbi, Tis Hazari, New Delhi within
5
–
6
Working
Days,
recommended.
CA. Rajat Mohan 9910044223
6. Deposit of Challan
•
After submission of challan, we have to deposit a copy of challan
with the revenue department.
•
After verification of challan (after 20 days of depositing of challan),
department issue a certificate of Stamp duty paid (1 day to 100
days).
• Format of Certificate of Stamp Duty Paid in on Next Slide.
CA. Rajat Mohan 9910044223
7. Certificate of Stamp Duty Paid
GOVERNMENT OF N.C.T OF DELHI
OFFICE OF THE CHIEF CONTROLLINF REVENUE AUTHORITY, DELHI
REVENUE DEPARTMENT: STAMP & REGN. BR., R.NO. 204, ‘B’ BLOCK
5-SHAM NATH MARG, DELHI-110054
No.F. 10(____)/COS(HQ)/Con.duty/
Dated:
CERTIFICATE
Certified that ___________________________ Pvt. Ltd. _______________________ _________________
has deposited consolidated stamp duty u/s 9(1)(b) of the Indian Stamp Act, 1899, amounting to Rs. _____
only chargeable under article 19 of schedule 1A of Indian Stamp Act, 1899 @ Rs. 1/- per thousand in
respect of issue of _________ equity shares of Rs. ___/- each bearing distinctive no. __ to ______.
Aggregate amount come to Rs.___/- The amount of Rs. ___/- has been deposited in State Bank of India, Tis
Hazari, Delhi on dd/mm/yyyy vide TR-6 No. _____________ which has been verified by the PAO-VI, Govt. of
NCT of Delhi vide No. ____ dated dd/mm/yyyy.
(__________)
SDM (HQ-II)/COS/HQ)
Ph. _________
To,
_____________________ Pvt. Ltd.
_____________________
_____________________
CA. Rajat Mohan 9910044223
8. Examples
Face value of
Share Capital
(A)
Premium
Amount
(B)
Total Value of Stamp Duty to
Share Capital be paid
(C = A+B)
(C*0.10%)
Rs. 1 Lac
0
Rs. 1 Lac
Rs. 100
Rs. 1 Lac
Rs. 9 Lac
Rs. 10 Lac
Rs. 1,000
Rs. 10 Lac
0
Rs. 10 Lac
Rs. 1,000
Rs. 10 Lac
Rs. 90 Lac
Rs. 1 Crore
Rs. 10,000
Rs. 1 Crore
0
Rs. 1 Crore
Rs. 10,000
Rs. 1 Crore
Rs. 99 Crore
Rs. 100 Crore
Rs. 10,00,000
CA. Rajat Mohan 9910044223
Stamp Duty not paid
within 30 Days of issue of
Certificate
CA. Rajat Mohan 9910044223
Procedure for Submission of Stamp Duty after
expiry of specified period
• The procedure is same as procedure for submission of Stamp Duty
on time(as discussed in previous point) but the only difference is that
we have to pay penalty i.e. 1 to 10 times depending upon the order
being passed by department.
• A notice is being sent by department to the Company if it fails to pay
the Stamp duty within Time Limits.
• Format of Notice is on Next Slide.
CA. Rajat Mohan 9910044223
Notice – Format
GOVERNMENT OF NCT OF DELHI
REVENUE DEPARTMENT
5-SHAM NATH MARG, DELHI – 110054.
No. F./Audit/Stamp duty/shares/10/****
Dated
To,
_______________________ PRIVATE LIMITED
________________,
________________
NEW DELHI.
Sub:- Non-payment of stamp duty chargeable on the issue of shares/debenture/Promissory
Note/Debenture-detected by Audit Party.
Sir,
It has been intimated by Audit Party, AGCR, New Delhi that you have executed/issued below mentioned share certificates
without paying any stamp duty chargeable under the provisions of the Indian Stamp Act, 1899.
SRN Date (mm/dd/yy) CIN Share
_____
______
____ ____
_____
______
____ ____
You are, therefore, directed to submit Original Share Certificates along with documentary proof with regard to payment of stamp
duty chargeable within 7 days of the receipt of this letter positively.
CA. Rajat Mohan 9910044223
(__________)
SDM (HQ-II)/COS/HQ)
Ph. _________
Penalty
CA. Rajat Mohan 9910044223
Penalty (Based on our Experience)
Department has not sent a Notice. You are
paying the duty suo-moto
1 Time
• Department sent a Notice.
Min. 3 Times
CA. Rajat Mohan 9910044223
Penalty
Duty is very high( Rs. 50000)
Request for penalty lower than 1 Time.
CA. Rajat Mohan 9910044223
FAQ’s
CA. Rajat Mohan 9910044223
FAQ’s
Q 1. Is Stamp Duty payable on Shares held in Demat Form & physical Form
both?
Ans. Yes, As per SDM, Revenue Department.
Q 2. Is Stamp Duty payable on Transfer of Shares?
Ans. There is No Stamp Duty payable on Transfer of Shares.
Q 3. What is the rate of Stamp Duty?
Ans. Allotment Before 1st Jan, 2000 – “25 paisa” per certificate.
Allotment After 1st Jan, 2000 – 0.1% of value of Share.
Q 3A. Do we need to deposit duty if 4 certificates were issued before 1 jan
2000?
Ans. Yes, 4*.25= Re 1 is to be paid to department. However department has
currently denied to issue any challan for theses petty amounts.
On our safer side application shall be submitted.
CA. Rajat Mohan 9910044223
Q 4. Is this applicable on Private Company , Public Company & Listed
Company?
Ans. Yes, As stated by SDM, Revenue Department. However as per our
information there are very few listed companies who are paying this
duty. This could be a litigative issue.
Q 5. Does this duty applicable on company registered office in Delhi
only?
Ans. Companies having registered office in Delhi & the companies
having registered office outside delhi but board meeting was held in
delhi regarding Issue of Share Certificates are liable to pay Stamp
Duty under Delhi Stamp Act.
CA. Rajat Mohan 9910044223
Q 6. If a company having registered office in Delhi & had Board meeting
outside Delhi regarding Issue of Share Certificates, then what is the
applicability?
Ans. Legally & technically Speaking, Stamp Duty should be applicable as
per the law of that state & No duty is payable under Delhi stamp Act.
However this view is not currently accepted by department.
Q 7. Is Stamp Duty applicable on premium also?
Ans. Yes, Stamp duty is payable on Face Value including premium.
Q 8. Can Revenue Stamps(Red color Stamps) be attached with the
certificate?
Ans. This view is not currently accepted by department & they require
the duty should be paid again in this authority.
CA. Rajat Mohan 9910044223
Q 9. Can duty be paid online?
Ans. No
Q 10. Can Challan be deposited at any Bank/Bank Branch?
Ans. No, Currently Challans are to be deposited with SBI, Tis Hazari.
Q 11. Stamp Duty is paid at the time of increase in share capital on website
MCA.GOV.IN is it required to be pay again?
Ans. Yes. That stamp Duty is on Increase of Share Capital & not on Share Certificates.
Q 12. If company Issued original share certificate then what they have to submit?
Ans. We advice that Original Share Certificates shall not be submitted in any case.
Submit Photocopy as attested by director.
Q 13. Is there any list of Defaulters?
Ans. Yes, based upon the data available on MCA a list has been prepared.
CA. Rajat Mohan 9910044223
Q 14. Is duty payable if shares issued are Bonus Shares from Security Premium &
Profit & Loss Account?
Ans. Yes, in both case.
Q 15. If Shares issued on discounted value then Stamp duty is payable on Face value
or Discounted Value?
Ans. Stamp Duty is payable on Discounted Value.
Q 16. If company want to minimize the penalty imposed by Collector of Stamp Duty
or want to file case against the department, then before which authority appeal
would be filed?
Ans. The appeal can be filed before Chief Controlling Revenue Authority (CCRA),
Board of Revenue (5, Sham Nath Marg, Delhi -110054).
Q 17. If company didn’t pay penalty after receiving notice from department then
what are the actions taken by department?
Ans. If Stamp Duty is not paid by the company after receiving Notice then
department issues a 2nd Notice nearly after 1 year of 1st Notice. If company didn’t
report to department within 15 days of issue of Notice then Department issues
3rd Notice to company for Compounding with 10 times penalty. There is no
prosecution under Indian Stamp Act but Collector of Stamp Duty & Chief
Controlling Revenue Authority (CCRA) may pass order for prosecution depending
upon the case.
CA. Rajat Mohan 9910044223
Q 18. What are the no. of visits for getting Stamping done with
department?
Ans. You have to visit min. 8 times if your case is of penalty i.e.
(a) Submission of documents.
(b) For taking date of Hearing.
(c) For Hearing of Your case.
(d) For taking challan.
(e) For Deposit of challan at Sbi, Tis Hazari.
(f) For submission of copy of Challan to department.
(g) For Verification of Challan.
(h) For taking Certificate of Stamping.
CA. Rajat Mohan 9910044223
Thank You all
- CA. Rajat Mohan
Contact No: 9910044223
Email: rajataggarwal008@gmail.com
CA. Rajat Mohan 9910044223