On July 29, 2025, the Revenue Department of Delhi issued a circular (‘Circular’) informing all companies with their registered office in the National Capital Territory of Delhi (‘NCT of Delhi’), that the stamp duty payable by them on issuance of shares must be paid at 0.1% of the share value, as per Article 19 of Schedule 1A of the Indian Stamp Act, 1899 (as applicable in NCT of Delhi) (‘Delhi Stamp Act’).

The Parliament had made certain amendments to Schedule I of the Indian Stamp Act, 1899 (i.e., the central legislation governing stamp duty) (‘Indian Stamp Act’) in 2020, pursuant to which the Central Government had prescribed a stamp duty of 0.005% for issuance of shares. However, the Circular highlights the constitutional basis for the Government of NCT of Delhi’s authority to prescribe stamp duty rates for issuance of shares. While the Central Government prescribes stamp duty for certain instruments under Entry 91 of List I (i.e., the Union List) of Schedule VII of the Constitution of India, as per Entry 63 in List II of Schedule VII (i.e., the State List), State Legislatures and State Governments are competent to prescribe stamp rates for all documents/ matters not specified in List I. Therefore, State Governments are authorised to prescribe stamp duty rates for issuance of shares.

The Circular has directed all companies (listed and unlisted) having their registered office in the NCT of Delhi to apply for adjudication of stamp duty on issuance of shares as per the Delhi Stamp Act, irrespective of whether such shares are issued in physical or demat form, and within the stipulated time frame. The Circular cautions that failure to comply with the stamp duty adjudication and payment requirements may result in penalties.