What is Stamp Duty?
It is a direct tax collected by State Governments under Section 3 of the Indian Stamp Act, 1899. It is levied on documents with financial transactions, including property transactions, bills of exchange, promissory notes, letters of credit, etc. A Stamp Duty paid document is considered a legal document that can be presented as evidence in a court of law.
What is Unified Stamp Duty / One Stamp Duty?
The Finance Bill, 2019, contains certain amendments in the Indian Stamp Act, 1899 (the Act) to bring uniformity in the levy of stamp duty on the securities market. Till 31st March 2020, stamp duty was charged at different rates based on the State of residence. However, with effect from 1st April 2020, stamp duty is charged uniformly irrespective of the State of residence. The collection process has also been revised: till 31st March 2020, brokers collected stamp duty and paid it directly to the respective State Governments. Effective 1st April 2020, brokers collect it on behalf of the stock exchange, which then pays it to the respective State Governments.
Note: As per Government Notification (CG-DL-E-30032020-218954) dated 30th March 2020, the implementation of Unified Stamp Duty is effective 1st of July 2020.
Old Rates:
Find the list of state-wise stamp duties.
New Rates:
| Type Of Trade | New Stamp Duty Rates For Buyers |
|---|---|
| Delivery equity trades | 0.015% |
| Intraday equity trades | 0.003% |
| Futures (Equity and Commodity) | 0.002% |
| Options (Equity and Commodity) | 0.003% |
| Currency | 0.0001% |
| Mutual funds | 0.005% |
Other Changes:
- Till 31st March 2020, stamp duty was applicable to both buyers and sellers. Effective 1st April 2020, only buyers are obligated to pay it.
- Reduction in the cost of trade as the rates for Currency and Interest Rate Derivatives have been slashed from Rs. 200 per crore to Rs. 10 per crore.
- No waiver of stamp duty on the transfer of securities and mutual fund units in dematerialized form.
- Stamp duty will be levied on off-market transfers done via DIS (Delivery Instruction Slip). It will be applicable based on the consideration amount entered on the DIS slip. Please note, stamp duty has to be paid in advance, i.e., before the execution of DIS.
