Stamp Duty on Share Transfers: Listed & Unlisted

Summary

Stamp duty is a mandatory tax for transferring both listed and unlisted shares, ensuring legal validity and regulatory compliance. For listed shares, it's auto-deducted by exchanges, while for unlisted shares via CDSL/NSDL, it must be paid manually (0.015% of the transaction value). Investors must use official portals for accurate calculation and timely payment to avoid delays or penalties. Skipping stamp duty can lead to rejected transactions and legal issues.

Whether you're transferring  listed shares or  unlisted ones, paying stamp duty is not optional—it's a legal requirement. Without it, your share transaction won't be processed or recognized.

Stamp duty is a government-imposed tax that validates the transfer of ownership in securities. It ensures your trade is officially recorded and compliant with regulatory norms.

In this guide, we’ll walk you through everything you need to know about:

• Stamp duty on listed and unlisted shares

• How it applies in  CDSL and NSDL transactions

• Current rates and how to calculate stamp duty

• Step-by-step compliance process, especially for unlisted share transfers

Whether you're an investor, startup founder, or just exploring the unlisted market, this guide will help you stay informed and compliant.

What is Stamp Duty?

A charge levied by the government on legal papers and transactions, such as share issuances and transfers, is called stamp duty. Stamp duty lends legal legitimacy to transactions involving the purchase or sale of shares, particularly when they are off-market, such as unlisted shares.

This is relevant to:

• Issue of securities (e.g., when a company issues new shares)

• Transfer of securities (e.g., when you buy/sell or gift shares)

• Both listed and unlisted shares

Stamp Duty Rates on Shares

1.Listed Shares (Market Transactions)

 These are automatically deducted by the stock exchanges like NSE or BSE.

2. Unlisted Shares (Off-Market Transactions via NSDL/CDSL)

 This needs to be paid manually via Net Banking (in CDSL) or through an online portal (in NSDL).

How to Calculate Stamp Duty?

Stamp Duty = Number of Shares × Price per Share × Applicable Stamp Duty Rate

For instance, transferring 1,000 unlisted shares at a price of ₹50 each

Amount of Consideration = 1,000 × ₹50 = ₹50,000

₹50,000 × 0.015% = ₹7.50 is the stamp duty.

Use the official stamp duty calculators for accurate amounts:

•  CDSL Stamp Duty Calculator

•  NSDL Stamp Duty Calculator

How to Pay Stamp Duty (CDSL)

Step 1: Add CDSL as a Beneficiary in Your Bank

Log in to your net banking platform and add CDSL’s stamp duty account as a beneficiary using the following details:

• Beneficiary Name: Central Depository Services (India) Limited
  
  
• Bank Name: ICICI Bank
  
  
• Branch: Nariman Point, Mumbai
  
  
• IFSC Code: ICIC0000104
  
  
• Account Number Format: CDSD<DPID><CLIENTID>

Note:

• The account number begins with CDSD, followed by:
• Your 8-digit DP ID
• Then your 8-digit Client ID
• This 16-digit format is unique to your demat account.
• You can find your DP ID and Client ID in your CMR (Client Master Report) or CML (Client Master List) — downloadable from your broker’s platform, usually under the Reports section.

Step 2: Make the Payment

Once the beneficiary is added and approved, transfer the stamp duty amount via NEFT or RTGS. Ensure the exact calculated amount is paid — even a minor difference can lead to rejection of your transfer request.

Step 3: Verify Payment

1. Visit CDSL’s payment portal

2. Log in with your credentials.

3. Check the payment status and note the 16-digit transaction number.

Step 4: OTP Authentication (if applicable)

1. For margin pledge transactions, CDSL will send an OTP link to your registered mobile number and email.

2. Click the link and enter your PAN or BOID.

3. Authenticate the OTP received on your mobile number.

Note: Ensure your contact details are updated with your DP for timely notifications.

How to Pay Stamp Duty (NSDL)

For unlisted share transfers via NSDL, the process is fully online and automated.

 Steps:

1. Visit NSDL Stamp Duty Calculator
   

2. Enter:

• Security Type

• Quantity

• Price

• Consideration

3. Click “Pay Stamp Duty”

4. A new window opens — enter:

• DP Name

• Client ID

• Mobile Number linked to your Demat

The portal auto-calculates stamp duty and allows online payment instantly.

What If I Don’t Pay Stamp Duty?

The transfer of your shares could not be enforceable in court.

DIS (Delivery Instruction Slip) processing may be rejected or delayed by CDSL/NSDL.

You can be subject to fines or problems with compliance.

Key Takeaways:
🔹Unlisted share transfers (both NSDL and CDSL) are subject to 0.015% stamp duty;
🔹 Always use official calculators to prevent overpayment or underpayment;
🔹 Pay via Net Banking (CDSL) or Online (NSDL) prior to submitting the transfer;
🔹 The exchange automatically deducts stamp duty for listed shares.

Conclusion

Despite its seemingly insignificant amount, stamp duty has a significant legal impact on share transfers. Understanding the procedure is crucial for efficient execution and compliance, particularly in the unlisted sector, where transactions take place off-market.

In addition to safeguarding your money, using the official portals, accurately calculating the amount, and paying on time guarantees a smooth transaction.

Keep stamp duty on your list whether you're working with listed equities or intend to invest in the upcoming pre-IPO unicorn.