According to a press release put out by the Government on 30th June, 2020, certain changes in stamp duty on financial securities will go into effect from today, 1st July.
Uniform stamp duty across the country
Earlier different rates of stamp duty were specified by different states. “Since some states levied very low rates on speculative trades and there was a tax arbitrage to be had by basing your office in such states. This arbitrage will now go due to a uniform rate across the country,” said Deepak Jasani, Head, Retail research at HDFC Securities.
Stamp Duty on Off Market ransactions
The circular aims to standardize the collection of stamp duty and plug certain loopholes. Transfer of shares of unlisted entities in physical form invited a stamp duty of 0.25% but this could be circumvented by transferring the shares in a demat form. But now that’s not the case.
Stamp duty on buyer, not buyer and seller
Stamp duty will only be imposed once and that too on the buyer. Earlier it was on both the buyer and the seller.
Collection by stock exchanges, clearing corporations and depositories
the exchanges will do the payment to states on behalf of brokers, reducing the burden on brokers.
Clarity on which state will collect the stamp duty
The notification clarifies that stamp duty will be payable to the state in which the client and specifically the buyer in a transaction is located.