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Stamp Paper & Legal Documents

Stamp Duty on Share Transfer: Demat, Physical and Unlisted Shares

Buyers pay 0.015% stamp duty on delivery share trades and 0.003% intraday. Off-market demat transfers cost the seller 0.015% of the consideration.

RM

Written by Rohan Mehta

Published 31 October 2026·6 min read

On this page9 sections
Credsir Stamp Paper & Legal Documents guide cover with a stamp icon

Stamp duty on buying shares through a stock exchange is 0.015% of the trade value for delivery trades and 0.003% for intraday trades, paid by the buyer. For an off-market transfer between demat accounts, the seller pays 0.015% of the declared consideration through the depository. A gift of shares with no consideration attracts no stamp duty.

Key facts

Transaction Rate Paid by
Shares, delivery trade on an exchange 0.015% Buyer
Shares, intraday (non-delivery) trade 0.003% Buyer
Equity and commodity futures 0.002% Buyer
Equity and commodity options 0.003% Buyer
Currency and interest rate derivatives 0.0001% Buyer
Transfer of debentures and corporate bonds 0.0001% Buyer
Issue of shares or debentures 0.005% Issuer (collected by depository)
Government securities Nil Not applicable
Off-market demat transfer for consideration 0.015% of consideration Transferor (seller)
OFS, takeover tender offer, buyback, delisting 0.015% Offeror (seller)

Exchange rates are from NSE’s charges page. The issue and off-market figures come from the SEBI FAQ and NSDL.

What changed on 1 July 2020

Before July 2020, each state charged its own duty on share transactions, and both buyer and seller could end up paying. The Finance Act, 2019 amended the Indian Stamp Act, 1899 so that one agency collects the duty once, at one uniform rate across India, from 1 July 2020.

Stock exchanges, through their clearing corporations, collect duty on exchange trades. Depositories (NSDL and CDSL) collect it on off-market transfers and on shares issued in demat form. Registrars to mutual funds collect it on units held in statement-of-account form. The collected duty is passed to the state where the buyer lives, within three weeks of the month’s end.

The old rate for physical share transfers, 25 paise per ₹100 (0.25%) under Article 62(a), was removed by the same Finance Act. For the law behind this, see our guide to the Indian Stamp Act, 1899.

Exchange trades: where the duty shows up

You do not pay stamp duty separately on an exchange trade. Your broker adds it to the charges on the contract note, alongside brokerage, securities transaction tax, exchange fees and GST. A delivery purchase of ₹1,00,000 carries ₹15 of stamp duty. The same amount traded intraday carries ₹3.

The seller does not pay stamp duty on a normal exchange sale. The exception is an offer for sale, takeover tender offer, buyback or delisting, where the offeror (the seller) pays 0.015%.

Off-market transfers between demat accounts

An off-market transfer is one you instruct through your depository participant (DP) rather than the exchange, for example selling shares to a relative or moving shares for a private deal.

  1. Fill in the delivery instruction slip, or the online instruction, with the target demat account details.
  2. State the reason for the transfer and the consideration amount.
  3. Pay the stamp duty the depository calculates on that consideration. NSDL collects it before the instruction is executed.
  4. Keep the transaction statement showing the duty collected.

SEBI’s FAQ says duty is charged on the consideration, so an off-market transfer without consideration, such as a gift or a transfer to legal heirs, attracts no stamp duty. A gift from someone who is not a relative can still be taxable income for you, so keep a written record of any gift. NSDL has a stamp duty calculator on its website for estimates. On pledge invocation, the pledgee pays.

Physical shares and Form SH-4

Listed companies have not processed transfers of physical shares since 1 April 2019. Unlisted public companies, and private companies other than small companies, must also issue and transfer securities in demat form under Rules 9A and 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

Where a transfer still happens outside an exchange or depository, Section 9B of the Stamp Act applies. The transferor pays duty on the consideration at the Schedule I rate, and the state’s own rules decide how it is paid. Some states still sell share transfer stamps; Gujarat’s stamps office lists them in denominations from ₹1 to ₹200.

Under Section 56 of the Companies Act, 2013, a company registers a transfer only if a proper transfer deed in Form SH-4, duly stamped, dated and signed by both parties, reaches it within 60 days of signing. The company then issues the certificate within one month.

SEBI has opened a special window from 5 February 2026 to 4 February 2027 for physical shares of listed companies bought or sold before 1 April 2019. The transferee needs the original certificate, a transfer deed signed before 1 April 2019, KYC papers, a client master list not older than two months, and an indemnity. Shares transferred this way are credited only in demat form and locked in for one year.

Stamp duty on issuing new shares

When a company issues shares in demat form, the depository collects 0.005% of the issue value from the issuer. A company issuing shares in physical form pays the same Schedule I rate itself under Section 9B, and state duty on share certificates may also apply. SEBI’s FAQ confirms that bonus shares, issued without consideration, do not attract stamp duty. For more on bonus issues and buybacks, see our guides to bonus shares and share buybacks.

Some states have sent companies demands at older state rates. Delhi’s revenue department, as reported by Vinod Kothari Consultants in December 2025, sought 0.1% on share issues. A company that receives such a notice should take legal advice.

Unlisted shares and mutual funds

Pre-IPO and unlisted shares are usually moved off-market between demat accounts, so the seller pays 0.015% of the price through the depository. Our unlisted shares guide covers the rest of that process.

Mutual fund purchases, including switches into a new scheme, carry 0.005% on the invested amount; SEBI’s FAQ gives the example of ₹500 on ₹1 crore. Redemptions carry no stamp duty.

Frequently asked questions

Is stamp duty charged when I sell shares?

Not on a normal exchange sale; the buyer pays. The seller pays in an off-market transfer, an offer for sale, a tender offer, a buyback or a delisting.

Is stamp duty on share transfer different in Delhi or Maharashtra?

No. Since 1 July 2020 the rates are the same across India, and the duty goes to the state where the buyer lives.

Do I pay stamp duty when gifting shares to my son?

No, if the transfer is made without consideration. The depository charges duty only on a declared consideration.

Who collects stamp duty on an NSDL off-market transfer?

NSDL, through your DP, before the instruction is executed. The transferor pays.

What is the stamp duty on physical share transfer through SH-4?

The transferor pays the Schedule I rate on the consideration under Section 9B. The payment method follows the state’s rules.

Are bonus shares subject to stamp duty?

No. SEBI’s FAQ says duty applies only where there is a price or consideration, and bonus shares are issued free.

Sources

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