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While managing a company in India, you need to take care of multiple things. One of the most important among them is paying stamp duty for increase in authorized share capital. What makes this aspect particularly important is that stamp-duty is not uniform across the country. In other words, this duty varies from one State/Union Territory to another.
Delhi, Maharashtra and Karnataka are among the most preferred destinations for company incorporation due to their developed infrastructure & technology, easy availability of skilled workforce and strong business ecosystems. However, the cost implications in each of these regions can differ significantly because of their respective stamp duty structures.
In this blog post, we will discuss and compare the stamp-duty on increase in authorized share capital in these key regions of India. If you have incorporated a company in any of these regions or are planning to do so, going through this blog post will give you an idea regarding the stamp duty you’ll need to pay to increase the authorized share capital during the course of business and plan business expenses better.
Stamp duty means state/central government tax levied on certain legal and financial documents to make them legally valid like sale deeds, transfer deeds, conveyance deeds, mortgage deeds, gift deeds, commercial and residential lease agreements, Memorandum of Association, partnership deeds, etc.
Stamp duty is levied on the alteration of the Memorandum of Association (MoA) when a company increases its authorised share capital, and the amount is calculated based on the extent of such increase, often capped at a maximum limit.
This duty must generally be paid online to the respective State/UT Government where the company’s registered office is situated as per the applicable state stamp laws in that State/UT, and Form SH-7 is the prescribed e-form that must be filed for intimating the Registrar of Companies about alteration in authorised share capital.
Stamp duties in India are governed by the Indian Stamp Act, 1899, as amended by respective states/UTs. The stamp duty charges levied on increase in authorized share capital in Delhi, Maharashtra and Karnataka are provided in the table below. :-
|
State/UT |
Stamp Duty on Authorized Capital Increase (SH-7) |
|
Delhi |
In Delhi, the Stamp-duty levied is 0.15% of the amount by which the authorized share capital is increased, subject to a maximum Stamp-duty of Rs. 25 lakhs. |
|
Maharashtra |
In Maharashtra, the applicable Stamp-duty is 0.20% (Rs. 1,000 on every Rs. 5 Lakhs) of increase in Authorised Share Capital or part thereof subject to a maximum of 50 Lakhs of Stamp-duty. |
|
Karnataka |
In Karnataka, the applicable Stamp-duty is approx. Rs. 500 on every Rs.10 lakhs of amount of increase in authorised capital or part thereof, subject to a minimum of Rs. 500. |
Source:- TaxGuru
Note:- Please note that the rates mentioned above are indicative and are subject to change based on state/UT amendments. Also, they do not apply to the Section 8 Companies. For most accurate information regarding stamp duty rates, we advise you to check the official websites of the respective state/UT’s Stamp Department.
The stamp duty levied on increase in authorized capital varies from one state/UT to another. If you are planning to increase this amount, then make sure to check the latest stamp duty rate applicable in your respective state/UT. If you need assistance in company registration, you can get in touch with our company incorporation experts at Registrationwala. We offer professional guidance as well as full-fledged support in the entire company incorporation process, from filing the SPICe+ form to getting the Certificate of Incorporation delivered to your doorstep.
Q1. What is Form SH-7?
A. It is an e-form that is filed by a company to report any alteration in its authorized share capital to the RoC.
Q2. What is the stamp-duty levied on authorized capital increase in Delhi?
A. The stamp-duty levied on authorized share capital increase in Delhi is 0.15% of the increased amount, with a maximum cap of Rs. 25 lakhs. This duty is payable while filing SH-7 Form with RoC.
Q3. Is stamp-duty consistent throughout all the states and union territories in India?
A. Not at all. The stamp-duty is rather inconsistent throughout the states and union territories in India. It differs significantly across different regions in the country.
Disclaimer :- This blog post is purely meant for educational purposes. While we have made every effort to provide our readers with accurate as well as complete information in this post, we cannot guarantee its full accuracy or completeness. Therefore, we suggest the readers verify with the official sources before making any decisions. Information in this content should not be interpreted as professional, academic, business, financial or legal advice at all.
I’m Manish Kumar, a content management professional with expertise in financial and regulatory matters. I specialize in turning complex compliance and incorporation concepts into clear, practical insights. As a regular contributor to the Registrationwala portal, I write about finance, taxation, government schemes, company formation, and statutory compliance. My focus is to provide accurate, up-to-date information that helps readers understand regulatory developments and their real-world implications.
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