Stamp Duty on Share Subscription Agreement in Delhi

Stamp Duty on Share Subscription Agreement in Delhi: A Complete Guide

If you`re looking to invest in a company by subscribing to its shares in Delhi, you will need to sign a share subscription agreement. This agreement is a legally binding document that outlines the terms and conditions of the share subscription and the obligations of both parties involved. However, before you sign the agreement, you must ensure that it is properly stamped as per the stamp duty regulations in Delhi.

What is Stamp Duty?

Stamp duty is a tax imposed by the government on legal documents to make them legally valid. It is regulated by the Indian Stamp Act, 1899, and the stamp duty rates vary from state to state. In Delhi, the stamp duty is levied on various types of documents, including share subscription agreements.

What is Share Subscription Agreement?

A share subscription agreement is a legal document that is prepared when an individual or an entity subscribes to the shares of a private limited company. It includes the terms and conditions of the subscription, such as the number of shares, the price per share, the payment schedule, and the rights and obligations of the parties involved.

Stamp Duty on Share Subscription Agreement in Delhi

In Delhi, the stamp duty on share subscription agreement is regulated by the Indian Stamp (Delhi Amendment) Act, 2004. The stamp duty rate on share subscription agreements in Delhi is 0.1% of the total amount of share capital subscribed, subject to a maximum of Rs. 2,50,000.

For example, if the total amount of share capital subscribed in the agreement is Rs. 10,00,000, the stamp duty payable would be Rs. 1,000 (0.1% of Rs. 10,00,000).

Payment of Stamp Duty

The stamp duty on share subscription agreement in Delhi can be paid either online or offline. For offline payment, you need to purchase a non-judicial stamp paper of the required amount and get it signed by the authorized officer. For online payment, you need to visit the e-stamping portal of the Delhi government and follow the steps for payment of stamp duty.

Conclusion

The share subscription agreement is an essential legal document that must be properly stamped to make it legally valid. The stamp duty on share subscription agreement in Delhi is 0.1% of the total amount of share capital subscribed, subject to a maximum of Rs. 2,50,000. You can pay the stamp duty either online or offline, depending on your convenience. It is essential to comply with the stamp duty regulations to avoid any legal consequences in the future.