+ 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
+ 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.
+ 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.
+ 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
+ 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
    • + 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
    + What is the process for administering the Stamp duty?
    The RTA has designed the following process for administering the stamp duty
    1. 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
    2. KFintech will share the details of the virtual bank account with the AIF
    3. 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
    4. 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
    5. After every transfer of money from the virtual account, by KFintech, AIF to replenish the virtual account with the same amount
    6. 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
    7. KFintech will provide to the AIF with all relevant details of deposit, including all challan numbers if any, as proof of deposit
    8. KFintech will also manage all monthly/quarterly and annual returns to SEBI on the stamp duty collected v/s paid etc.
    + 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.
    + 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
    + 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
    + Will the stamp duty applicable in for units held in physical mode paid?
    Yes. Stamp duty shall be applicable for both Physical & electronic mode
    + 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
    + 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
    + 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)
    + 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