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ONLINE PAYMENT OF STAMP DUTY ON SHARE CERTIFICATES

ONLINE PAYMENT OF STAMP DUTY ON SHARE CERTIFICATES

Share certificate is a certificate given to the equity share holder of the company in form SH-1. Share certificate being an instrument requires stamping. 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 supplementary shares allotment.

Share certificate is a printed signed document which depicts a legal proof of ownership of the number of shares specified in that certificate.

What is Stamp duty?

Stamp duty is a duty levied on the legal recognition to pay amount of tax on certain documents or instruments.

Time Limit for issuance of share certificate

As per Companies Act, 2013, there are certain time period within which company shall issue share certificates after incorporation and allotment-

  1. If the event is shares is issued to subscribers of MOA at the time of Incorporation then within 2 months share certificate has to be issued.
  2. If the event is allotment of shares i.e., fresh allotment after incorporation, then within 1 month from the date of allotment share certificate has to be issued.

Timeline to pay stamp duty without stay

As per Indian Stamp Act, if the event is date of issue of share certificate then the time period is within 30 days.

Every company is obligatory to pay stamp duty on the value of shares through online mode within 30 days from the date of issue of share certificates.

Talking About Jurisdiction

Stamp duty need to be paid where the registered office of the company is located.

Duty payable on stamping of shares (IN DELHI)

Stamp duty paid on the share certificates is Rs. 1/- for every Rs. 1000/- or part thereof of the value of the shares including the amount of premium.

Documents required

In case shares is 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
  • 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

In case of shares allotment after incorporation-

  • Signed share certificate
  • Company COI, MOA and AOA
  • Form PAS -3 alongwith Payment Receipt filed to ROC (in case of further allotment)
  • List of allottees
  • Board resolution of shares allotment to allottees
  • 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.
  • Certificate of earlier paid stamp duty, optional

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

Company shall pay the stamp duty through SHCIL e-stamp website link by online mode.

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

Process Duration

So, if at a time all the required documents submitted on the portal, then-

  • After 1 or 2 weeks challan shall get produced
  • Stamp Duty amount will be paid via Net Banking/Debit Card/ Cash/ NEFT/ RTGS.
  • Print the receipt
  • Take e-Stamp Certificate from the nearest branch of Delhi Stockholding after providing printed receipt.
  • Upload e-stamp Certificate copy
  • After scrutiny and fixing of e-Stamp certificate, the certificate of stamp duty paid amount shall get issued and, then
  • Final certificate can be downloaded from the status menu via online.

Thereafter, within one month stamping process will get complete.

Further in case of delay

As soon as all the essential documents give in to on the portal, then-

  • Reference number will be produced after compliance.
  • Initiated request status can be seen in the status side.
  • Hearing date shall also be seen in status side after 1 or 2 weeks or provided through email or if not received within the specified time, contact to Stamp Collector, Delhi.
  • In hearing with SDM, penalty shall be charged up to ten times of stamp duty. The penalty depends on defence of the authorized professional.
  • The challan shall be generated within 1 or 2 weeks of hearing.

In case of duplicate/split share certificate

Amount of Rs. 10/- stamp duty shall have to be paid, As it was already paid on the particular share certificates bearing distinctive number of shares.

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 within the time limit of 30 days then, the company shall be liable for heavy penalty under the Act, which may extend to 10 times of the duty.

Also, Company has to attend hearing on the date that would be given by the concern department/authority.

Conclusion

The share certificate shall bear the stamp duty as per the respective State from where certificate is issued. So, it is not essentially required to pay stamp duty on share certificate in that particular state where registered office of the company is located, it totally depends on the execution of share certificate where it was signed. At last, it is advice to all please pay the stamp duty in the state where registered office of the company is located.

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21 Aug

Ayushi Agrawal
CS Ayushi Agrawal

All in Startup: Launching a New Idea When Everything is on the line!! But doing something that isn’t done before takes the world from zero to one. NEUSOURCE takes an progressive approach to building startups. THINK OUTSIDE THE INBOX!!