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Stamp duty on Security Transactions in India

Stamp duty on Security Transactions in India

Effective from 1st July 2020, The GOVT of India has implemented the changes in the Indian stamp act 1899, The said amendment broadly provide for a centralized mechanism for the collection of stamp duty on securities market instruments in a single place, via one agency, and at unified rates across India, with an appropriate allocation of the tax revenue between the state governments based on the registered office/residence of the ultimate purchaser.

Key Features of new stamp duty amendment

  • Unified rates across India
  • All mutual fund transactions are liable for stamp duty with standardized charges across states.
  • Stock exchanges act as collecting agents for secondary market transactions in securities, while depositories collect stamp duty in respect of all off-market transactions and the initial issuance of securities in a dematerialized form.
  • Stamp duty is payable either by the purchaser or the seller on a transaction and not both
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Unified Stamp duty on Security transactions in India

The stamp duty rates applicable to the various types of security transaction are as follows:

Type of Security Rate (%)
Debentures-Issue 0.005%
Debentures-Transfer and reissue 0.0001%
Shares -Issue 0.005%
Equity Delivery Trade 0.015%
Intraday Trades 0.003%
Futures (equity and commodity) 0.002%
Options (equity and commodity) 0.003%
Currency and interest rate derivatives 0.0001%
Other derivatives 0.002%
Government securities Nil
Repo on corporate bonds 0.00001%

Who is responsible for payment of stamp duty on security transactions?

The below table helps you to find out who is responsible for the payment of stamp duties:

Type of transaction Payee
Sale of security through the stock exchange Purchaser
Sale of security other than through a stock exchange Seller
Transfer of security through a depository Transferor
Transfer of security other than through a stock exchange or depository Transferor
Issue of security Issuer
Any other instrument not specified Person making, drawing or executing such instrument

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