Through Finance Act 2019, amendments were brought to the Indian Stamp Act, 1899. The amendments made comes into effect from 1st July 2020 onwards. These amendments were made for building a pan-India securities market and to boost Ease of Doing Business.
About the Amendments
- For building a pan-India securities market, a centralized system of stamp duty with a unified rate has been brought under the amendments.
- A uniform stamp duty across all the states will be imposed for all financial securities transactions.
- For stock exchange, duty on the transaction of securities will be deposited to the Central Government.
- As per the legal and institutional mechanism, the stamp duty is collected by the State Government, under the uniformity, the Central Government will deposit it to the State Government based on the place from where the trade took place.
- For other financial securities transactions (non-stock exchange), depositories will collect stamp duties on behalf of the State Government.
- For Transfer and reissue of debentures, the rate of duty proposed under the unified system is 0.0001 percent.
- The rate of duty would vary for financial securities transactions related to the stock exchange or derivate products such as Mutual Funds etc in between 0.0005 percent to 0.015 percent
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