Starting a company in Delhi involves several legal compliances, and one of the most important yet often ignored compliances is share certificate stamping. Every company incorporated in Delhi must pay stamp duty on the issue of share certificates to subscribers and shareholders.
This blog explains the complete procedure for share stamping in Delhi, applicable laws, timelines, required documents, penalties, and the online process through SHCIL.
What is Share Stamping?
Share stamping means payment of stamp duty on share certificates issued by a company to its shareholders.
Under the Indian Stamp Act, 1899 and applicable Delhi stamp regulations, every company issuing shares must pay stamp duty on the value of shares allotted.
This compliance is mandatory at:
- Time of incorporation
- Further allotment of shares
- Rights issue
- Preferential allotment
Legal Provisions for Share Stamping
The following laws govern share certificate stamping in Delhi:
- Companies Act, 2013
- Indian Stamp Act, 1899
- Delhi Stamp Rules
- MCA Compliance Rules
As per law:
- Share certificates must be issued within prescribed timelines.
- Stamp duty must be paid within 30 days from issuance of share certificates.
Applicability of Share Stamp Duty in Delhi
Share stamp duty is applicable on:
| Transaction | Stamp Duty Applicable |
|---|---|
| Incorporation of Company | Yes |
| Allotment of Shares | Yes |
| Issue of Physical Share Certificates | Yes |
| Rights Issue | Yes |
| Preferential Allotment | Yes |
Rate of Stamp Duty in Delhi
For companies having registered office in Delhi:
- Stamp Duty = 0.1% of share value (face value/premium as applicable).
Example:
If a company issues shares worth ₹10,00,000:
- Stamp Duty = ₹1,000
Timeline for Share Certificate Issuance
At the Time of Incorporation
The company must issue share certificates to subscribers within:
- 2 months from incorporation date
In Case of Further Allotment
Share certificates must be issued within:
- 60 days from allotment date
Time Limit for Payment of Stamp Duty
Stamp duty on share certificates must be paid:
- Within 30 days from issue of share certificates
Delay may attract:
- Penalty
- Interest
- Adjudication proceedings
Complete Procedure for Share Stamping in Delhi
Step 1 – Incorporation of Company
Step 2 – Conduct Board Meeting
Step 3 – Prepare Share Certificates
Step 4 – File PAS-3 with ROC
Step 5 – Calculate Stamp Duty
Step 6 – Register on SHCIL Portal
Step 7 – Upload Required Documents
Step 8 – Online Payment of Stamp Duty
Penalty for Non-Payment of Share Stamp Duty
Failure to pay stamp duty may lead to:
- Monetary penalty
- Additional adjudication fee
- Legal complications during investment/funding
- Delay in due diligence process
Late payment may require appearance before stamp authorities.