Highlights of Amendment in Indian Stamp Act, 1899

The Finance Bill, 2019 had proposed certain amendments in the Indian Stamp Act, 2019. The amendments are related to levy and administration of stamp duty on securities market instruments by the states at one place through one agency viz. stock exchanges or it’s clearing corporations or depositories. The agency will share collected stamp duty appropriately with respective states based on the state of domicile of the ultimate buying client.

The Highlights of the same are as follows:

• Inserted certain definition such as allotment list, securities, debentures, market value
• Definition of instruments is broadened to provide for documents in electronic form or otherwise created for a transaction in a stock exchange or depository
• Stamp duty is levied on transfer of securities in demat form.
• Stamp Duty is not applicable in case of Demat or Remat of Securities
• All the transactions (Issue, transfer of securities etc.) through stock exchanges and depositories are now under the purview of stamp duty in addition to issue/transfer of securities held physically.

The stamp duty will be collected by stock exchange/clearing corporation/depositories as the case may be, from issuer/seller at the time of settlement of transactions. The Applicable Rate for various transactions and who will be responsible for paying stamp duty is given in table below:

Transaction	Earlier Stamp Duty	Revised Stamp Duty
Securities other than Debentures
Issue of Security	As per State Stamp Act – 0.1% as per Maharashtra Stamp Act	0.005% [new Article 56A]
Transfer of securities on delivery basis	0.25% as per Indian Stamp Act [earlier Article 62(a)]	0.015%
Transfer of securities on non-delivery basis	0.25% as per Indian Stamp Act [earlier Article 62(a)]	0.003%
Debentures
Issue of Debentures (Marketable)	As per State Stamp Act – As per Maharashtra Stamp Act - Under Article 1 -Acknowledgement of Debt – Rs. 100 for value Rs. 10 lakhs or more	On delivery basis – 0.015% [new Article 56A] On non-delivery basis – 0.003% [new Article 56A]
Issue of Debentures (Non - Marketable)	No stamp duty prescribed
Derivatives
Futures (equity and commodity)	No stamp duty prescribed	0.002%
Options  (equity and commodity)	No stamp duty prescribed	0.003%
Currency and Interest rate derivatives	No stamp duty prescribed	0.0001%
Other Derivatives	No stamp duty prescribed	0.002%
Repo on Corporate Bonds	No stamp duty prescribed	0.00001%
Government Securities	No stamp duty prescribed	0%

Who will be responsible for paying stamp duty?

Transaction	Instrument Chargeable	Who will pay stamp duty?	Who will collect stamp duty?
Sale through Stock Exchange	Clearance List	Buyer	Stock Exchange or Clearing Corporation authorised by it
Transfer of securities by a Depository	delivery instruction slip	Transferor	Depository
Issue of securities, any creation or change in the records of a depository	Allotment list	Issuer	Depository
Issuance of securities otherwise than through a stock exchange or depository	Share Certificate	Issuer	Depository
Sale / Transfer or re-issue of securities with consideration otherwise than through a stock exchange or depository	Share Transfer Deed	Transferor	Depository

The amendments proposed in Stamp Act, 1899 through Finance Bill, 2019 made effective from 9^th January, 2020.[1]

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[1] Notified vide notification no. S.O. 4419(E) dated 10th December, 2019