Stamp Duty on Issue of Shares in Delhi 2026: Rate, Applicability, Payment Process & Penalty

A company issuing shares must comply with the Companies Act, 2013, as well as applicable stamp-duty requirements. For the Delhi-based companies, this compliance requires particular attention because the rate specified by the Delhi Revenue Department differs from the rate under the central securities stamp-duty framework.

Understanding the stamp duty on issue of shares in Delhi can help companies avoid deficient-duty demands, penalties and complications during investment, due diligence or restructuring.  

Quick Summary

Planning a share allotment in Delhi? Remind Legal can assist with stamp-duty calculation, adjudication and documentation.

Is Stamp Duty Applicable to the Issue of Shares?

Yes. Stamp duty applies to an instrument or document evidencing a shareholder’s right or title to newly issued shares.

It may arise in transactions such as: -

• Initial subscription at incorporation;
• Rights issues;
• Preferential allotments;
• Private placements;
• ESOP exercises;
• Conversion of convertible securities; and
• Other fresh issues of equity or preference shares.

An issue of shares should not be confused with a transfer of shares. A fresh issue creates the new shares, while a transfer changes the ownership of existing shares. Different rates and the collection procedures may apply to these transactions.

Stamp Duty Rate in Delhi in 2026

The Delhi Revenue Department issued Circular No. F.10(166)/COS(HQ)/STAMP.BR/2025/93 dated 29 July 2025. It states that companies having their registered offices in the National Capital Territory of Delhi must pay stamp duty at 0.1% of the value of shares issued under the Article 19 of Schedule I-A of the Indian Stamp Act, 1899, as applicable to Delhi.

The Department reportedly reaffirmed or reconfirmed this position in a subsequent communication dated 29 September 2025, including shares issued in the physical or dematerialised form. You can always check and review the regulatory circulars and the various notifications through the Delhi Revenue Department.

For example, if the value accepted for the adjudication is ₹20,00,000: -

Stamp duty = ₹20,00,000 × 0.1% = ₹2,000

The assessable value should be confirmed from the transaction documents and, where necessary, through adjudication. Companies should not automatically assume whether only nominal value or an amount including securities premium will be accepted without examining the applicable provision and the Collector’s directions.

Why Is There Confusion Between 0.1% and 0.005%?

The amended central framework under the Indian Stamp Act prescribes a rate of 0.005% of consideration for an issue of securities, generally collected through a depository. This framework became operational on 1 July 2020.

However, the 2025 Delhi circular relies on Article 19 of Schedule I-A, as applicable to Delhi and specifies 0.1% of the value of shares issued. It seeks to apply this rate to both physical and dematerialised shares of companies having their registered offices in Delhi.

Therefore, a legal and procedural difference exists between the central securities-stamping framework and the Delhi’s administrative position. It would be inaccurate to make a blanket statement that only 0.005% applies to every share issue in Delhi. Until the matter is judicially or administratively settled, companies should review and examine the latest Delhi circulars and obtain transaction-specific advice from the competent Collector of Stamps.

Who Must Pay the Stamp Duty?

The issuing company is responsible for ensuring that the appropriate stamp duty is paid. Its directors, company secretary or authorised representative may complete the process, but appointing a professional does not remove the company’s underlying responsibility.

The company should maintain the following records: -

• Certificate of incorporation;
• Memorandum and articles of association;
• Board and shareholder resolutions;
• Return of allotment and MCA acknowledgement;
• List of allottees;
• Share valuation and consideration details;
• Share certificates or demat records; and
• Stamp-duty challan and adjudication order.

Payment Process for Delhi Companies

1. Identify the transaction
   Confirm whether the transaction is a fresh issue, bonus issue, transfer, conversion or any other corporate action.

2. Determine the assessable value
   Examine the face value, issue price, securities premium and the consideration involved. Seek adjudication where the correct and exact calculation base is uncertain.

3. Calculate the duty
   Calculate the duty according to the Delhi circular. If a depository has already collected duty at 0.005%, obtain the advice on whether differential duty must be paid.

4. Prepare and submit the application
   Submit the prescribed application and various supporting allotment documents to the competent Collector of Stamps in Delhi for the adjudication.

5. Pay through the authorised channel
   Pay the assessed or estimated amount through the payment method as specified or prescribed by the Collector. Depending on the applicable procedure, this may also involve the authorised SHCIL e-stamping mechanism. Avoid purchasing an ordinary e-stamp under an incorrect article or the transaction category.

6. Preserve the evidence
   Retain the challan, e-stamp certificate and adjudication order with the company’s statutory records.

Time Limit for Payment

Section 17 of the Indian Stamp Act generally requires an instrument executed in India to be stamped before or at the time of execution. Accordingly, a company should arrange stamping when the relevant share document is executed instead of assuming that a general 30-day grace period is available.

The two-month period under Section 56 of the Companies Act for delivering share certificates is a separate company-law requirement and should not be treated as an extension for stamp-duty payment.

Penalty for Non-Payment or Short Payment

An unstamped or insufficiently stamped instrument may be impounded and may not be admitted in evidence until the required duty and penalty are paid.

Under Section 40 of the Indian Stamp Act, the authority may recover the deficient duty and impose an applicable penalty, which can extend to ten times the deficient portion. This is a maximum exposure and not necessarily an automatic ten-times penalty in every case.

Conclusion

Companies issuing shares in Delhi should calculate the duty carefully and properly, follow the applicable adjudication process and also preserve the proof of payment. Particular care is necessary because the rate specified by Delhi differs from the central securities-stamping rate.

Contact Remind Legal for assistance with stamp duty on issue of shares in Delhi and various related corporate compliance.