Quantum of Stamp Duty applicable
How can I find out what stamp duty is payable on a share purchase agreement drawn up in west Bengal? Will the place of registration determine how much duty is payable or will it be dependent on where the money is actually paid in exchange of shares?
Schedule 1A of the Indian Stamp Act, 1899 (as amended for West Bengal) provides for the rate of stamp duty payable for various transactions. Article 5(b) (ii) of Schedule 1A provides for stamp duty payable for an agreement or memorandum of agreement relating to the sale of a share in an incorporated company or other body corporate. The corresponding stamp duty to be paid with respective to such documents is fifty paise for every Rs. 5,000 or part thereof of the value of the share. Thus for the Share Purchase Agreement, the stamp duty payable will be calculated on the basis of the total value of the share purchased as per the provided rate. As regards the place in context of which stamp duty is to be paid, the same depends on the place of execution pf the Share Purchase Agreements and not the place of registration. As per Section 3 (aa) and (bb) of the Indian Stamp Act (as amended in West Bengal), the instruments which are executed in West Bengal or are executed out of West Bengal are chargeable with duty in West Bengal. Therefore in the present case, the stamp duty chargeable will depend on the place where the agreement is executed.
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