Recently, the Delhi Revenue Department has issued a clarification stating that the applicable stamp duty rate on the issuance of shares whether in physical or dematerialized form is 0.1%, superseding the previously considered rate of 0.005%.
Accordingly, all companies having their registered office within the NCT of Delhi must now ensure compliance with Article 19 of Schedule I-A of the Indian Stamp Act, 1899 as applicable to NCT of Delhi (Delhi Act).
Key Implications:
- The 0.1% rate applies irrespective of the mode of share issuance (physical/digital).
- This change impacts, inter-alia, private placements, preferential issues, ESOPs, sweat equity, and other share allotments.
- Non-compliance may attract penalties and interest under the Act.