Stamp Duty on Issuance of Shares in Delhi

Stamp Duty on Issuance of Shares in Delhi. The Revenue Department, Stamp and Registration Branch of the Government of NCT of Delhi, issued Circular No. P10/SCI/COR/HQ/STAMP.BR/2025/93 on 21st July 2025, to clarify the applicable stamp duty on issuance of share certificates or other documents evidencing the right or title to shares, scrip, or stock of any incorporated company having its registered office in Delhi. This step was taken to ensure clarity on the rate of stamp duty applicable under Article 19 of Schedule I-A of the Indian Stamp Act, 1899 (as applicable to Delhi), especially considering dematerialisation of shares or digital issuances of shares.
Legal Framework
To properly understand this circular, it is essential to examine the constitutional and legislative provisions that govern the levy and collection of stamp duty on financial instruments and documents.
Constitutional Provisions
Under the Seventh Schedule of the Indian Constitution, both the Union and State Governments have powers related to stamp duty. Entry 91 of the Union List empowers the Central Government to prescribe and collect stamp duty on instruments such as bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, transfer of shares, debentures, proxies, and receipts. On the other hand, Entry 63 of the State List grants authority to State Governments to prescribe and collect stamp duty on instruments not covered under the Union List. This includes documents like share certificates and other instruments evidencing title to shares, scrip, or stock in a company. Hence, while the Central Government regulates the types of instruments, State Governments determine and levy the applicable rates of stamp duty on documents falling within their jurisdiction.
The Indian Stamp Act, 1899
The Indian Stamp Act, 1899 provides the overarching legal framework for the levy of stamp duty across India. Section 3 of the Act is the charging section, which specifies the kinds of documents on which stamp duty is applicable. It includes instruments executed in India or received in India that relate to matters situated within the country. Schedule I of the Act lists instruments on which the Central Government can prescribe stamp duty, while Schedule I-A contains State-specific amendments applicable in states like Delhi. Under Article 19 of Schedule I-A, which is specific to Delhi, a stamp duty of 0.1% of the value of shares is applicable on instruments that evidence the right or title to shares, scrip, or stock. This applies equally to both physical and electronic forms of issuance.
Key Contents of The Circular
Applicability of the Circular to Companies in NCT of Delhi
The circular issued by the Revenue Department, Stamp and Registration Branch, Government of NCT of Delhi, applies comprehensively to all companies whether listed or unlisted whose registered office is located within the National Capital Territory (NCT) of Delhi. This includes public and private companies regardless of the size of their operations or market status. The decisive factor for applicability is the location of the registered office, not where the company carries out its business operations. As a result, any company registered in Delhi must adhere to the directives of this circular when issuing shares. This regulatory requirement ensures that the stamp duty obligations are geographically aligned with the jurisdiction of the Delhi Government.
Scope of Documents Covered Under the Circular
The circular mandates that stamp duty shall be applicable to any certificate or document that evidences the right or title to shares, scrip, or stock in any incorporated company. These documents may include traditional physical share certificates, allotment letters, or digitally executed instruments issued in dematerialised (DEMAT) format through depositories such as NSDL or CDSL. This clarification is critical, as it removes any ambiguity regarding whether digital share issuances are exempt. The circular confirms that the nature or format of issuance physical or electronic does not alter the underlying liability for stamp duty, as the legal effect remains the same: such instruments confer ownership rights in the company.
Stamp Duty Rate Under Article 19 of Schedule I-A
In accordance with Article 19 of Schedule I-A of the Indian Stamp Act, 1899, as applicable to Delhi, a uniform stamp duty rate of 0.1% is prescribed on instruments that evidence the allotment or right to shares. This rate applies to the value of shares being issued, which may be the face value, issue price (including premium), or fair market value in case of non-cash consideration or corporate restructuring. The rate is applicable uniformly to all categories of shares, including equity, preference, bonus shares, rights issues, and shares issued during mergers or acquisitions. The imposition of this rate provides a predictable and transparent basis for calculating stamp duty obligations in the territory.
Learn more about duplication of share certificate.
Requirement of Adjudication of Stamp Duty
Before or immediately after issuing shares, companies must apply for adjudication of stamp duty with the Stamp Authority under the Revenue Department of Delhi. Adjudication is a process where the competent stamp officer evaluates the nature and content of the documents, verifies supporting information, and determines the correct duty payable under law. This step ensures that stamp duty is properly calculated and paid, thereby rendering the instrument legally valid and admissible in evidence. Without adjudication, even correctly paid stamp duty may be disputed if not certified by the competent authority. The adjudication process also helps in maintaining compliance records that are essential during audits or scrutiny by regulatory bodies.
Supporting Documents Required for Adjudication
To successfully complete the adjudication process, companies must submit certain prescribed documents along with their application. These typically include the board resolution approving the allotment of shares, a copy of Form PAS-3 filed with the Registrar of Companies (ROC), a list of allottees and their respective shareholdings, and a valuation certificate in case the shares are issued against consideration other than cash. In addition, the company must provide a copy of the digital or physical share certificate or allotment document, proof of consideration received, and a duly filled adjudication form as per Delhi Stamp Office guidelines. These documents must be submitted within the time limit stipulated under Section 17 of the Indian Stamp Act, which is typically within 30 days from the date of execution or issuance.
Consequences of Non-Compliance
Failure to adhere to the requirements of the circular and the Indian Stamp Act can lead to serious consequences. If a company does not apply for adjudication or fails to pay the required stamp duty, it becomes liable to penalties under Section 35 and Section 62 of the Indian Stamp Act, 1899. These penalties may include a fine of up to ten times the deficient stamp duty amount. Moreover, unstamped or inadequately stamped documents are not admissible as evidence in a court of law or by any regulatory authority such as the ROC. Depositories like NSDL and CDSL may also refuse to process share allotments if proof of stamp duty payment is not provided. Additionally, such non-compliance may lead to inspection, legal notices, and other enforcement actions by revenue authorities, thereby exposing the company and its officers to unnecessary risk.
Summary and Compliance Responsibility
In conclusion, the circular issued by the Delhi Revenue Department serves to reinforce the statutory obligation of all companies registered in Delhi to pay stamp duty at the rate of 0.1% on any issuance of shares, whether physical or electronic. It clearly mandates that no form of issuance is exempt from stamp duty and that the responsibility for adjudication and payment lies solely with the issuer company, not the shareholder. This directive seeks to standardize compliance, enhance revenue collection, and ensure the legal enforceability of share-related instruments. Companies are advised to keep track of every share issuance, timely apply for adjudication, maintain proper documentation, and make necessary payments to avoid penalties and ensure smooth corporate governance and regulatory compliance. 
Related Concepts to Understand this Better
What Is a Share Certificate?
A share certificate is a legal document issued by a company to its shareholders that certifies ownership of a specific number of shares in the company. It serves as conclusive evidence of ownership and is thus subject to stamp duty under the Indian Stamp Act as it is considered a document evidencing title to shares.
What Is Adjudication of Stamp Duty?
Adjudication refers to the process of obtaining a formal determination from the stamp authorities regarding the correct amount of stamp duty payable on a document. This process ensures that the duty is properly calculated and paid, making the document valid and legally admissible. It also protects companies from future penalties or disputes regarding under-stamping.
Does It Apply to DEMAT Shares?
Yes. The circular explicitly states that stamp duty applies to the issuance of shares even in dematerialised or digital format. The mode of issuance physical or electronic does not affect the liability. The reason is that even digital issuances serve as legally recognized instruments that evidence the ownership or right to shares and thus are subject to stamp duty.
Who Must Pay the Stamp Duty?
The responsibility to apply for adjudication and ensure proper payment of stamp duty lies with the issuer company. The shareholder is not liable in this regard. The company must complete the process within the prescribed time limits and maintain records of stamp duty payment to ensure legal compliance and avoid regulatory issues.
What Happens If You Don't Pay?
Non-compliance with the provisions of the Indian Stamp Act can result in significant penalties. These can include fines of up to ten times the amount of unpaid stamp duty. In addition, improperly stamped documents can be treated as invalid, and regulatory authorities like the Registrar of Companies or depositories (NSDL/CDSL) may refuse to process the issuance. The company may also face legal consequences for failing to adhere to statutory obligations.
Communication to Stakeholders
To ensure uniform implementation, copies of this circular have been sent to the Secretary (Revenue) and Deputy Commissioners of the Revenue Department, as well as to the General Managers of National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), and the Registrar of Companies, NCT of Delhi. This step ensures that depositories and regulatory authorities are fully informed and aligned to enforce this requirement effectively.
Compliance Checklist for Companies (With Delhi Registered Office)
All companies having their registered office in Delhi must first verify if they are issuing shares in any form physical or electronic. Upon issuance, they are required to calculate 0.1% of the total value of shares to determine the stamp duty payable. They must then apply for adjudication through the Stamp Office with all relevant supporting documents, such as board resolutions and share issuance details. Timely payment of the duty is essential to avoid penalties. Companies must also retain proof of payment for record-keeping and regulatory submissions, especially during audits or filings with the Registrar of Companies.
Conclusion
This circular is a compliance directive underlining the obligation of companies registered in Delhi to pay stamp duty at the rate of 0.1% on the issuance of shares, as per Article 19 of Schedule I-A of the Indian Stamp Act, 1899. It applies to both physical and digital share issuances and removes ambiguity by clarifying that dematerialised issuances are not exempt. The objective is to ensure consistent revenue collection, legal validity of instruments, and uniform enforcement of stamp duty laws across all incorporated companies with offices situated in the NCT of Delhi.
FAQs
Q1. What is the purpose of the circular issued by the Delhi Revenue Department? 
Ans. The circular clarifies the applicable stamp duty rate on documents evidencing the right or title to shares, scrip, or stock of incorporated companies having their registered office in the National Capital Territory (NCT) of Delhi. It reaffirms that stamp duty must be paid under Article 19 of Schedule I-A of the Indian Stamp Act, 1899, even for shares issued in dematerialised (DEMAT/digital) form.
Q2. Who does this circular apply to? 
Ans. It applies to all listed and unlisted companies whose registered office is situated in the NCT of Delhi, regardless of where they carry out operations or whether the shares are issued in physical or electronic format.
Q3. What kind of documents are covered under this circular? 
Ans. The circular applies to any certificate or document that evidences the right or title to shares, scrip, or stock, including:

Physical share certificates

Digital allotments (DEMAT)

Share allotment letters

Allotment advice documents

Q4. Does the stamp duty apply to DEMAT (digital) share issuances? 
Ans. Yes. The circular explicitly clarifies that even digital or dematerialised issuances attract stamp duty, as they also serve as valid legal instruments conveying ownership of shares.
Q5. What is the applicable rate of stamp duty under Article 19 of Schedule I-A? 
Ans. The applicable stamp duty rate is 0.1% (i.e., one-tenth of one percent) of the value of shares issued. This rate is uniform across all types of share issuances within Delhi.
Q6. How is the ‘value of shares’ determined for calculating stamp duty? 
Ans. The value of shares is generally based on:

Issue price (including premium, if any),

Fair market value (in case of non-cash consideration or bonus/right issues),

Face value, where applicable, as per board resolution and relevant valuation reports.

Q7. What is stamp duty adjudication and is it mandatory? 
Ans. Yes, adjudication is mandatory. Adjudication refers to the process of obtaining official confirmation from the Delhi Stamp Authority about the correct stamp duty payable on a share issuance document. Companies must apply for adjudication before or immediately after issuing shares.
Q8. What documents are required for adjudication of stamp duty? 
Ans. Key documents generally required include:

Board resolution for share allotment

Form PAS-3 (filed with ROC)

List of allottees

Valuation certificate (if applicable)

Copy of share certificate or digital allotment

Proof of consideration (if any)

Duly filled adjudication form

Q9. Within how much time must adjudication be completed? 
Ans. Under Section 17 of the Indian Stamp Act, 1899, companies are required to submit the instrument for stamping within 30 days of execution or issuance. Delayed submission may attract penalties.
Q10. What are the consequences of non-compliance with this circular? 
Ans. Non-compliance may lead to:

Penalties up to 10 times the stamp duty amount under Section 35 of the Indian Stamp Act

Invalidity of unstamped documents for legal or evidentiary purposes

Rejection of filings by ROC, NSDL, or CDSL

Regulatory scrutiny or legal proceedings by the Stamp Authority

Q11. Does this stamp duty apply to bonus shares and right shares? 
Ans. Yes. Stamp duty applies even to bonus and right share issuances, as they are still instruments conferring ownership, regardless of whether consideration is paid.
Q12. Who is responsible for paying the stamp duty the company or the shareholder? 
Ans. The issuer company is responsible for calculating, paying, and adjudicating stamp duty. Shareholders are not required to pay this duty directly.
Q13. Is this stamp duty in addition to the market-based stamp duty collected by depositories? 
Ans. Yes. This circular relates to the issuance of shares (primary market), whereas market-based transactions (secondary market) involving transfer of shares attract separate stamp duty under the amended Indian Stamp Act (post-2020 changes), which is collected by depositories like NSDL and CDSL.
Q14. What legal provisions empower the State Government to impose this duty? 
Ans. Under the Constitution of India, Entry 63 of the State List empowers states to determine and collect stamp duty on documents not listed in Entry 91 of the Union List. The Indian Stamp Act, 1899 (as amended by Delhi), further enables the State to levy such duties through Schedule I-A.
Q15. Can a company seek exemption from this duty? 
Ans. Unless a specific exemption is granted under a central or state law or through a notification (such as for startups or charitable organizations), all companies must comply, and no general exemption is available.
Q16. Is there any online portal to complete this adjudication in Delhi? 
Ans. As of now, adjudication for such purposes is generally handled offline through submission at the designated Stamp Office (Room No. 203 or 204, B-Block, 5 Sham Nath Marg, Delhi). However, companies should check the official Delhi Revenue Department portal or contact the local authority for updated procedures.
Q17. Who are the key stakeholders copied on the circular? 
Ans. The circular has been formally circulated to:

Secretary (Revenue) and Divisional Commissioner

Deputy Commissioners (HQ), Revenue Department

General Managers of NSDL and CDSL

Registrar of Companies (NCT of Delhi)

This ensures uniform enforcement and alignment across depositories and regulatory bodies.
Q18. Where can one access the full circular? 
Ans. The full circular may be obtained from the Revenue Department Stamp and Registration Branch, Govt. of NCT of Delhi, or may be uploaded on the official Delhi Government Revenue portal. It is also typically circulated through ROC and depository communications.

The Revenue Department, Stamp and Registration Branch of the Government of NCT of Delhi, issued Circular No. P10/SCI/COR/HQ/STAMP.BR/2025/93 on 21st July 2025, to clarify the applicable stamp duty on issuance of share certificates or other documents evidencing the right or title to shares, scrip, or stock of any incorporated company having its registered office in Delhi. This step was taken to ensure clarity on the rate of stamp duty applicable under Article 19 of Schedule I-A of the Indian Stamp Act, 1899 (as applicable to Delhi), especially considering dematerialisation of shares or digital issuances of shares.

Legal Framework

To properly understand this circular, it is essential to examine the constitutional and legislative provisions that govern the levy and collection of stamp duty on financial instruments and documents.

Constitutional Provisions

Under the Seventh Schedule of the Indian Constitution, both the Union and State Governments have powers related to stamp duty. Entry 91 of the Union List empowers the Central Government to prescribe and collect stamp duty on instruments such as bills of exchange, cheques, promissory notes, bills of lading, letters of credit, insurance policies, transfer of shares, debentures, proxies, and receipts. On the other hand, Entry 63 of the State List grants authority to State Governments to prescribe and collect stamp duty on instruments not covered under the Union List. This includes documents like share certificates and other instruments evidencing title to shares, scrip, or stock in a company. Hence, while the Central Government regulates the types of instruments, State Governments determine and levy the applicable rates of stamp duty on documents falling within their jurisdiction.

The Indian Stamp Act, 1899

The Indian Stamp Act, 1899 provides the overarching legal framework for the levy of stamp duty across India. Section 3 of the Act is the charging section, which specifies the kinds of documents on which stamp duty is applicable. It includes instruments executed in India or received in India that relate to matters situated within the country. Schedule I of the Act lists instruments on which the Central Government can prescribe stamp duty, while Schedule I-A contains State-specific amendments applicable in states like Delhi. Under Article 19 of Schedule I-A, which is specific to Delhi, a stamp duty of 0.1% of the value of shares is applicable on instruments that evidence the right or title to shares, scrip, or stock. This applies equally to both physical and electronic forms of issuance.

Key Contents of The Circular

Applicability of the Circular to Companies in NCT of Delhi

The circular issued by the Revenue Department, Stamp and Registration Branch, Government of NCT of Delhi, applies comprehensively to all companies whether listed or unlisted whose registered office is located within the National Capital Territory (NCT) of Delhi. This includes public and private companies regardless of the size of their operations or market status. The decisive factor for applicability is the location of the registered office, not where the company carries out its business operations. As a result, any company registered in Delhi must adhere to the directives of this circular when issuing shares. This regulatory requirement ensures that the stamp duty obligations are geographically aligned with the jurisdiction of the Delhi Government.

Scope of Documents Covered Under the Circular

The circular mandates that stamp duty shall be applicable to any certificate or document that evidences the right or title to shares, scrip, or stock in any incorporated company. These documents may include traditional physical share certificates, allotment letters, or digitally executed instruments issued in dematerialised (DEMAT) format through depositories such as NSDL or CDSL. This clarification is critical, as it removes any ambiguity regarding whether digital share issuances are exempt. The circular confirms that the nature or format of issuance physical or electronic does not alter the underlying liability for stamp duty, as the legal effect remains the same: such instruments confer ownership rights in the company.

Stamp Duty Rate Under Article 19 of Schedule I-A

In accordance with Article 19 of Schedule I-A of the Indian Stamp Act, 1899, as applicable to Delhi, a uniform stamp duty rate of 0.1% is prescribed on instruments that evidence the allotment or right to shares. This rate applies to the value of shares being issued, which may be the face value, issue price (including premium), or fair market value in case of non-cash consideration or corporate restructuring. The rate is applicable uniformly to all categories of shares, including equity, preference, bonus shares, rights issues, and shares issued during mergers or acquisitions. The imposition of this rate provides a predictable and transparent basis for calculating stamp duty obligations in the territory.

Learn more about duplication of share certificate.

Requirement of Adjudication of Stamp Duty

Before or immediately after issuing shares, companies must apply for adjudication of stamp duty with the Stamp Authority under the Revenue Department of Delhi. Adjudication is a process where the competent stamp officer evaluates the nature and content of the documents, verifies supporting information, and determines the correct duty payable under law. This step ensures that stamp duty is properly calculated and paid, thereby rendering the instrument legally valid and admissible in evidence. Without adjudication, even correctly paid stamp duty may be disputed if not certified by the competent authority. The adjudication process also helps in maintaining compliance records that are essential during audits or scrutiny by regulatory bodies.

Supporting Documents Required for Adjudication

To successfully complete the adjudication process, companies must submit certain prescribed documents along with their application. These typically include the board resolution approving the allotment of shares, a copy of Form PAS-3 filed with the Registrar of Companies (ROC), a list of allottees and their respective shareholdings, and a valuation certificate in case the shares are issued against consideration other than cash. In addition, the company must provide a copy of the digital or physical share certificate or allotment document, proof of consideration received, and a duly filled adjudication form as per Delhi Stamp Office guidelines. These documents must be submitted within the time limit stipulated under Section 17 of the Indian Stamp Act, which is typically within 30 days from the date of execution or issuance.

Consequences of Non-Compliance

Failure to adhere to the requirements of the circular and the Indian Stamp Act can lead to serious consequences. If a company does not apply for adjudication or fails to pay the required stamp duty, it becomes liable to penalties under Section 35 and Section 62 of the Indian Stamp Act, 1899. These penalties may include a fine of up to ten times the deficient stamp duty amount. Moreover, unstamped or inadequately stamped documents are not admissible as evidence in a court of law or by any regulatory authority such as the ROC. Depositories like NSDL and CDSL may also refuse to process share allotments if proof of stamp duty payment is not provided. Additionally, such non-compliance may lead to inspection, legal notices, and other enforcement actions by revenue authorities, thereby exposing the company and its officers to unnecessary risk.

Summary and Compliance Responsibility

In conclusion, the circular issued by the Delhi Revenue Department serves to reinforce the statutory obligation of all companies registered in Delhi to pay stamp duty at the rate of 0.1% on any issuance of shares, whether physical or electronic. It clearly mandates that no form of issuance is exempt from stamp duty and that the responsibility for adjudication and payment lies solely with the issuer company, not the shareholder. This directive seeks to standardize compliance, enhance revenue collection, and ensure the legal enforceability of share-related instruments. Companies are advised to keep track of every share issuance, timely apply for adjudication, maintain proper documentation, and make necessary payments to avoid penalties and ensure smooth corporate governance and regulatory compliance.

Related Concepts to Understand this Better

What Is a Share Certificate?

A share certificate is a legal document issued by a company to its shareholders that certifies ownership of a specific number of shares in the company. It serves as conclusive evidence of ownership and is thus subject to stamp duty under the Indian Stamp Act as it is considered a document evidencing title to shares.

What Is Adjudication of Stamp Duty?

Adjudication refers to the process of obtaining a formal determination from the stamp authorities regarding the correct amount of stamp duty payable on a document. This process ensures that the duty is properly calculated and paid, making the document valid and legally admissible. It also protects companies from future penalties or disputes regarding under-stamping.

Does It Apply to DEMAT Shares?

Yes. The circular explicitly states that stamp duty applies to the issuance of shares even in dematerialised or digital format. The mode of issuance physical or electronic does not affect the liability. The reason is that even digital issuances serve as legally recognized instruments that evidence the ownership or right to shares and thus are subject to stamp duty.

Who Must Pay the Stamp Duty?

The responsibility to apply for adjudication and ensure proper payment of stamp duty lies with the issuer company. The shareholder is not liable in this regard. The company must complete the process within the prescribed time limits and maintain records of stamp duty payment to ensure legal compliance and avoid regulatory issues.

What Happens If You Don't Pay?

Non-compliance with the provisions of the Indian Stamp Act can result in significant penalties. These can include fines of up to ten times the amount of unpaid stamp duty. In addition, improperly stamped documents can be treated as invalid, and regulatory authorities like the Registrar of Companies or depositories (NSDL/CDSL) may refuse to process the issuance. The company may also face legal consequences for failing to adhere to statutory obligations.

Communication to Stakeholders

To ensure uniform implementation, copies of this circular have been sent to the Secretary (Revenue) and Deputy Commissioners of the Revenue Department, as well as to the General Managers of National Securities Depository Limited (NSDL), Central Depository Services (India) Limited (CDSL), and the Registrar of Companies, NCT of Delhi. This step ensures that depositories and regulatory authorities are fully informed and aligned to enforce this requirement effectively.

Compliance Checklist for Companies (With Delhi Registered Office)

All companies having their registered office in Delhi must first verify if they are issuing shares in any form physical or electronic. Upon issuance, they are required to calculate 0.1% of the total value of shares to determine the stamp duty payable. They must then apply for adjudication through the Stamp Office with all relevant supporting documents, such as board resolutions and share issuance details. Timely payment of the duty is essential to avoid penalties. Companies must also retain proof of payment for record-keeping and regulatory submissions, especially during audits or filings with the Registrar of Companies.

Conclusion

This circular is a compliance directive underlining the obligation of companies registered in Delhi to pay stamp duty at the rate of 0.1% on the issuance of shares, as per Article 19 of Schedule I-A of the Indian Stamp Act, 1899. It applies to both physical and digital share issuances and removes ambiguity by clarifying that dematerialised issuances are not exempt. The objective is to ensure consistent revenue collection, legal validity of instruments, and uniform enforcement of stamp duty laws across all incorporated companies with offices situated in the NCT of Delhi.

FAQs

Q1. What is the purpose of the circular issued by the Delhi Revenue Department?

Ans. The circular clarifies the applicable stamp duty rate on documents evidencing the right or title to shares, scrip, or stock of incorporated companies having their registered office in the National Capital Territory (NCT) of Delhi. It reaffirms that stamp duty must be paid under Article 19 of Schedule I-A of the Indian Stamp Act, 1899, even for shares issued in dematerialised (DEMAT/digital) form.

Q2. Who does this circular apply to?

Ans. It applies to all listed and unlisted companies whose registered office is situated in the NCT of Delhi, regardless of where they carry out operations or whether the shares are issued in physical or electronic format.

Q3. What kind of documents are covered under this circular?

Ans. The circular applies to any certificate or document that evidences the right or title to shares, scrip, or stock, including:

Physical share certificates
Digital allotments (DEMAT)
Share allotment letters
Allotment advice documents

Q4. Does the stamp duty apply to DEMAT (digital) share issuances?

Ans. Yes. The circular explicitly clarifies that even digital or dematerialised issuances attract stamp duty, as they also serve as valid legal instruments conveying ownership of shares.

Q5. What is the applicable rate of stamp duty under Article 19 of Schedule I-A?

Ans. The applicable stamp duty rate is 0.1% (i.e., one-tenth of one percent) of the value of shares issued. This rate is uniform across all types of share issuances within Delhi.

Q6. How is the ‘value of shares’ determined for calculating stamp duty?

Ans. The value of shares is generally based on:

Issue price (including premium, if any),
Fair market value (in case of non-cash consideration or bonus/right issues),
Face value, where applicable, as per board resolution and relevant valuation reports.

Q7. What is stamp duty adjudication and is it mandatory?

Ans. Yes, adjudication is mandatory. Adjudication refers to the process of obtaining official confirmation from the Delhi Stamp Authority about the correct stamp duty payable on a share issuance document. Companies must apply for adjudication before or immediately after issuing shares.

Q8. What documents are required for adjudication of stamp duty?

Ans. Key documents generally required include:

Board resolution for share allotment
Form PAS-3 (filed with ROC)
List of allottees
Valuation certificate (if applicable)
Copy of share certificate or digital allotment
Proof of consideration (if any)
Duly filled adjudication form

Q9. Within how much time must adjudication be completed?

Ans. Under Section 17 of the Indian Stamp Act, 1899, companies are required to submit the instrument for stamping within 30 days of execution or issuance. Delayed submission may attract penalties.

Q10. What are the consequences of non-compliance with this circular?

Ans. Non-compliance may lead to:

Penalties up to 10 times the stamp duty amount under Section 35 of the Indian Stamp Act
Invalidity of unstamped documents for legal or evidentiary purposes
Rejection of filings by ROC, NSDL, or CDSL
Regulatory scrutiny or legal proceedings by the Stamp Authority

Q11. Does this stamp duty apply to bonus shares and right shares?

Ans. Yes. Stamp duty applies even to bonus and right share issuances, as they are still instruments conferring ownership, regardless of whether consideration is paid.

Q12. Who is responsible for paying the stamp duty the company or the shareholder?

Ans. The issuer company is responsible for calculating, paying, and adjudicating stamp duty. Shareholders are not required to pay this duty directly.

Q13. Is this stamp duty in addition to the market-based stamp duty collected by depositories?

Ans. Yes. This circular relates to the issuance of shares (primary market), whereas market-based transactions (secondary market) involving transfer of shares attract separate stamp duty under the amended Indian Stamp Act (post-2020 changes), which is collected by depositories like NSDL and CDSL.

Q14. What legal provisions empower the State Government to impose this duty?

Ans. Under the Constitution of India, Entry 63 of the State List empowers states to determine and collect stamp duty on documents not listed in Entry 91 of the Union List. The Indian Stamp Act, 1899 (as amended by Delhi), further enables the State to levy such duties through Schedule I-A.

Q15. Can a company seek exemption from this duty?

Ans. Unless a specific exemption is granted under a central or state law or through a notification (such as for startups or charitable organizations), all companies must comply, and no general exemption is available.

Q16. Is there any online portal to complete this adjudication in Delhi?

Ans. As of now, adjudication for such purposes is generally handled offline through submission at the designated Stamp Office (Room No. 203 or 204, B-Block, 5 Sham Nath Marg, Delhi). However, companies should check the official Delhi Revenue Department portal or contact the local authority for updated procedures.

Q17. Who are the key stakeholders copied on the circular?

Ans. The circular has been formally circulated to:

Secretary (Revenue) and Divisional Commissioner
Deputy Commissioners (HQ), Revenue Department
General Managers of NSDL and CDSL
Registrar of Companies (NCT of Delhi)

This ensures uniform enforcement and alignment across depositories and regulatory bodies.

Q18. Where can one access the full circular?

Ans. The full circular may be obtained from the Revenue Department Stamp and Registration Branch, Govt. of NCT of Delhi, or may be uploaded on the official Delhi Government Revenue portal. It is also typically circulated through ROC and depository communications.