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When will the amended provisions of
the Stamp Act and Rules made
thereunder will come into force?
The amended provisions of the Indian Stamp Act, 1899 brought
through Finance Act, 2019 and Rules made thereunder shall
come into force w.e.f 1st July 2020
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Who will collect the Stamp Duty on
behalf of the State Government?
The stamp-duty on sale of securities, transfer of securities and
issue of securities shall be collected on behalf of the State
Government by the Stock Exchange or Clearing Corporation
authorized or Depositories (authorized collecting agents). The
Central Government has also notified the Clearing Corporation
of India Limited (CCIL) and the Registrars to Issue and / or Share
Transfer Agents to act as collecting agents.
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When and how will the stamp duty be
transferred to each State?
The collecting agents shall within three weeks of the end of each
month and in accordance with the Rules made in this behalf by
the Central Government, transfer the stamp-duty collected to
the State Government where the residence of the buyer is
located and in case the buyer is located outside India, to the
State Government having the registered office of the trading
member or broker of such buyer and in case where there is no
such trading member of the buyer, to the State Government
having the registered office of the participant.
The collecting agent shall transfer the collected stamp-duty in
the account of concerned State Government with the Reserve
Bank of India or any scheduled commercial bank, as informed to
the collecting agent by the Reserve Bank of India or the
concerned State Government.
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Will any information be provided to
the State Government in respect of
the stamp duty collected?
The collecting agent shall submit a return of stamp-duty
collected on various transactions to the State Government
including details of defaulters in the prescribed format on a
monthly basis to be furnished manually or electronically within
seven days of the succeeding month. Further, the collecting
agent shall furnish a consolidated return of stamp-duty
collected during a financial year manually or electronically on or
before the 30th June immediately following that financial year
to the concerned State Government and the Accountant General
of each State.
The State Government may provide an online facility by which a
collecting agent shall upload State wise monthly and yearly
returns. Further, if a collecting agent fails to submit details of
transactions to the Government or submits a document or makes a declaration which is false or which such
person knows
or believes to be false, shall be punishable with fine of one lakh
rupees for each day during which such failure continues or one
crore rupees, whichever is less
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How will the stamp duty be calculated
in case of issuance of AIF Units?
Stamp duty is imposed on the value of units excluding other
charges like service charge, AIF fee, GST etc. If the units are
issued for Rs.1 crore then Rs.500 would be the stamp duty to be
remitted to States.
Stamp duty will be calculated @ 0.005% on net investment
value by rounding off the value up to two decimal values (i.e.
up to the value of Re 0.01, stamp duty will be charged).
As per the guidelines, this will be calculated on the inclusive
method using the below formula:
((100/100.005)*0.005)/100 leading to the multiplier value of
0.0000499975001249938. Accordingly, for Rs. 1 crore
investment a stamp duty of Rs. 499.98 by rounding off to
two decimals would be applicable.
Net investment value refers to Gross investment value less
transaction charges, or other applicable deductions
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Is stamp duty applicable on
redemption of AIF units?
Redemption is not liable to duty as it is neither a transfer nor an
issue nor a sale
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What is the process for administering
the Stamp duty?
The RTA has designed the following process for administering
the stamp duty
- KFintech will open 2 bank accounts-
1. Virtual account for deposit
of
stamp
duty
2. Account for parking the stamp duty till it is paid to
the state account
- KFintech will share the details of the virtual bank
account with the AIF
- Basis the average of last 6 months inflow of funds, AIF
to transfer an advance payment of 0.005% of the inflow
amount (Contribution) to this bank account
- On every allotment, AIF will share the MIS in the format
prescribed by KFintech, which will include the value of
the stamp duty. To be shared on T+1. (T being date of
allotment) Currently this can be done thru email,
however, we will explore if we can have an API facility to
take data from the AIF system
- After every transfer of money from the virtual account,
by KFintech, AIF to replenish the virtual account with the
same amount
- KFintech will deposit the amount to the state account in
the method defined by SEBI (method to be still designed
by them), within 21 days of the subsequent month
- KFintech will provide to the AIF with all relevant details
of deposit, including all challan numbers if any, as proof
of deposit
- KFintech will also manage all monthly/quarterly and
annual returns to SEBI on the stamp duty collected v/s
paid etc.
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What information is needed by
KFintech for depositing the stamp
duty
KFintech will need the following information for depositing the
stamp duty to the respective state account.
a. Correct details of allotment as per the format designed
and shared by KFintech
b. Declaration from AIF that all monies received have been
accounted for and all allotments have been made as per
law.
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Will KFintech help with reports
needed by SEBI on stamp duty?
Yes, KFintech will provide necessary reports on the subject.
Reports will be filed with SEBI with copy to Fund
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In which state will the stamp duty
for NRI investors be paid?
In case there is a distributor involved in the mobilization of
funds, the stamp duty will be paid in the state in which the
distributor has his office, else in case there is no distributor
involved, the domicile of the AIF will be the state to which
stamp duty will be paid
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Will the stamp duty applicable in for
units held in physical mode paid?
Yes. Stamp duty shall be applicable for both Physical &
electronic mode
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Will the Stamp duty be applicable on
Transfer of units from Broker
account to Investor account?
No. As the stamp duty is already deducted at the time of
issuance of units, stamp duty will not be applicable on Transfer
of units from Broker account to Investor account
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Will Stamp Duty be applicable for
conversion of units from physical
mode to demat mode (Statement of
Accounts to Demat)?
No. As the stamp duty is already deducted at the time of
issuance of units, stamp duty will not be applicable on
conversion of units from physical mode to demat mode
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Would the Stamp Duty amount be
displayed separately in the
Statement of Account?
Yes. Stamp duty amount shall be displayed separately against
each applicable transaction in the Statement of Account (SOA)
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Who will collect the Stamp duty in
case of AIF transactions (sale,
transfer and issue of units in demat
mode) through recognized Stock
Exchange or Depository?
As clear from the Act that in case of AIF transactions (sale,
transfer and issue of units in demat mode) through recognized
Stock Exchange or Depository as defined under SCRA, 1956
and Depositories Act, 1996 respectively, the respective Stock
Exchange/authorized Clearing Corporation or a Depository is
already empowered to collect stamp duty as per Amended
Indian Stamp Act and Rules made thereunder
