The Ministry of Finance (MOF) has notified the Indian Stamp (Collection of Stamp Duty through Stock Exchanges, Clearing Corporations and Depositories) Rules, 2019 which shall come into effect from January 09, 2020, to notify the Stamp Duty to be levied in case of Transfer of shares in Demat form.
Further, to streamline the stamp duty regime on financial securities transactions in India done electronically through stock exchanges or authorized clearing corporations or through depositories. The government has defined collecting agents who shall be authorized for collection of the stamp duty on behalf of state governments in case of issue or transfer of securities. It shall include stock exchanges or clearing corporations or a depository.
The stamp duty leviable under Section 9A(1) of the Stamp Act on issue and sale of securities shall be collected by the authorized collecting agents in the manner prescribed under the Rules on the specified transactions and on prescribed value.
Accordingly, the transferor shall pay the stamp duty on the consideration specified by him in the delivery instruction slip (electronic or otherwise), and such consideration shall be considered as actual consideration amount. The stamp duty, on the issuance of new securities/transfer of securities in the depository system, shall be paid/collected before the creation of new security/execution of all off-market transfers.The stamp duty shall be collected on the entire sale consideration when a transfer is effected irrespective of the consideration paid in part or in installments. The rules end any ambiguity pertaining to the applicability of stamp duties on the transfer of securities in electronic/ dematerialized form.
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