What Is the Stamp Duty on a Private Company Share Transfer in 2026? (The 0.25% Figure Is Wrong)

Search for the stamp duty on a share transfer and you'll find 0.25% quoted with real confidence, sometimes on sites dated this year, sometimes on a practitioner forum thread where someone with a CS or CA after their name states it as settled fact. It isn't. The rate changed in 2019, took effect in 2020, and a meaningful share of the content answering this question hasn't caught up.

Where the 0.25% figure came from, and why it stopped being law in 2019

The 0.25% rate, quoted as "25 paise per Rs 100," came from Article 62(a) of Schedule I to the Indian Stamp Act, 1899. The Finance Act, 2019 omitted that entry. It isn't there anymore. The Act's amended Section 29 confirms the omission directly, and it's the single most reliable way to check this yourself if you want to see it in the source text rather than take our word for it.

The current rate: 0.015%, uniform since 1 July 2020

The Finance Act, 2019 replaced the old article-based rate with a single central rate for transfer of securities on a delivery basis, effective 1 July 2020. That rate is 0.015%, and it applies to physical, non-depository transfers, the kind SH-4 covers, exactly the same as it applies to demat transfers off an exchange. One rate, one form of transfer, no separate physical-versus-demat carve-out at this stamp-duty step.

A worked example: old rate vs. new rate

Take a straightforward transfer with a consideration of Rs 10,00,000. This is an arithmetic illustration to show the scale of the change. It isn't a quoted government fee for your specific transfer.

That's real money. Someone calculating a transfer at the old rate is overpaying by more than sixteen times what's actually owed.

Who actually pays: the legal default vs. market convention

This half of the question doesn't have one clean answer, and we'd rather say so than pick a side that sounds more definitive than it is. Section 29 of the Indian Stamp Act, and the case law built around it, Union of India v. Kulu Valley Transport Ltd. (1958) and Mrs. G.R. Parry v. Union of India (1962), place the duty on the transferor, the seller, by default, absent a contrary agreement between the parties.

In practice, that default gets overridden constantly. A meaningful share of current guidance states flatly that the buyer pays, reflecting how these deals actually get negotiated rather than what the statute assumes if nobody agrees otherwise. Put the allocation in writing in your transfer paperwork. Don't assume either side is automatically on the hook.

How stamp duty fits into an SH-4 share transfer end to end

A private company share transfer usually isn't a filing with the ROC the way a share allotment is. It's a company-secretarial act: the transferor and transferee execute Form SH-4, the transfer goes through whatever approval your Articles require, board sign-off, a right-of-first-refusal offer to existing members, and the company updates its own register of members. Stamp duty on the SH-4 instrument sits inside that internal process rather than as a separate government filing step.

Getting the rate wrong doesn't just cost money if you overpay. It can also create a paper trail that doesn't match what the law actually requires, which is exactly the kind of detail that surfaces later during diligence for a fundraise or an exit.

Raising money in the same round as a transfer? Our share allotment service covers the PAS-3 side of a cap-table event, since transfers and allotments often show up in the same conversation.

Need the board resolution approving the transfer first? Our free board resolution, share transfer approval template covers it, one of four routine post-incorporation board resolutions we publish free.