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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
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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
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KFintech will share the details of the virtual bank account with
the AIF
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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
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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
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After every transfer of money from the virtual account, by
KFintech, AIF to replenish the virtual account with the same
amount
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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
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KFintech will provide to the AIF with all relevant details of
deposit, including all challan numbers if any, as proof of deposit
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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
