Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The securities clauses of section 2 of the Indian Stamp Act, 1899 are the vocabulary of the stamp-duty rules for shares, debentures and other securities traded or issued through exchanges and depositories. They come from Act 7 of 2019, section 12, and the footnotes give the effective date as 1 July 2020 (with the note that it was earlier notified with effect from 9 January 2020 followed by 1 April 2020). This article covers clauses (23A), (27), (10B), (7A), (7B), (1), (10A), (15A), (16A) and (16B).
"Securities" takes in securities as defined in the Securities Contracts (Regulation) Act, 1956, a "derivative" as defined in the Reserve Bank of India Act, 1934, certain short-term debt instruments, and anything else the Central Government declares by notification. "Market value" is the price at which a security is traded on an exchange, or otherwise the price or consideration mentioned in the instrument. A "debenture" is defined widely and is excluded from "bond". These meanings feed sections 8A, 9A and 9B.
How to read this article
This article is based on the consolidated text of the Act consulted (latest amendment shown: Act 13 of 2021); later amendments should be checked. It explains the central Act only. Stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, so the State must be checked; for debentures and transfers of shares, section 9(2)(a) names the Central Government as "the Government", and any reduction or remission under section 9 and later amendments should be checked. The text consulted contains no notification under any of these clauses, so none is described. For share transfers in practice, see our share transfer service.
The definitions in other Acts (the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the Reserve Bank of India Act, 1934) are only cross-referred here and are not explained.
Clause (23A): "securities"
"Securities" includes:
- securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
- a "derivative" as defined in clause (a) of section 45U of the Reserve Bank of India Act, 1934 (2 of 1934);
- a certificate of deposit, commercial usance bill, commercial paper, repo on corporate bonds and such other debt instrument of original or initial maturity up to one year as the Reserve Bank of India "ma specify" from time to time (the copy prints "ma"; the sense is "may"); and
- any other instrument declared by the Central Government, by notification in the Official Gazette, to be securities for the purposes of this Act.
Clauses (27), (10B), (7A) and (7B): the market infrastructure
| Clause | Term | What the text says |
|---|---|---|
| (27) | Stock exchange | includes (i) a recognised stock exchange as defined in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956, and (ii) such other platform for trading or reporting a deal in securities as the Central Government may specify by notification for this Act |
| (10B) | Depository | includes (a) a depository as defined in clause (e) of section 2(1) of the Depositories Act, 1996 (22 of 1996), and (b) any other entity declared by the Central Government by notification to be a depository for this Act |
| (7A) | Clearance list | a list of transactions of sale and purchase relating to contracts traded on the stock exchanges, submitted to a clearing corporation in accordance with the law for the time being in force in this behalf |
| (7B) | Clearing corporation | an entity established to undertake the activity of clearing and settlement of transactions in securities or other instruments, and includes a clearing house of a recognised stock exchange |
The "clearance list" matters because section 9A(1)(a) charges duty on "each such sale in the clearance list". The "stock exchange" meaning includes any other platform specified by notification for trading or reporting a deal in securities, so the reach of the term can be widened by the Central Government. Our posts on depository participants and beneficial owners explain the depository system without relying on this Act.
Clause (1): "allotment list"
"Allotment list" means a list containing details of allotment of the securities intimated by the issuer to the depository under sub-section (2) of section 8 of the Depositories Act, 1996 (22 of 1996). Section 9A(1)(c) charges duty on "the allotment list".
Clause (10A): "debenture"
The copy prints the heading as "debenturte". The clause says "debenture" includes:
- (i) debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not;
- (ii) bonds in the nature of debenture issued by any incorporated company or body corporate;
- (iii) certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity up to one year as the Reserve Bank of India may specify from time to time;
- (iv) securitised debt instruments; and
- (v) any other debt instruments specified by the Securities and Exchange Board of India from time to time.
The same Act of 2019 added to the definition of "bond" in clause (5) the words "but does not include a debenture", so a debenture is not also a bond. Companies Act matters such as how debentures are issued are covered in our posts on debentures; this article states nothing from inside them.
Clauses (15A), (16A) and (16B): issue, marketable security and market value
- Issue (15A): the copy defines "issue" as "any person making an issue of securities". This reads like the word "issuer", which is the word sections 8A, 9A and 9B actually use. The slip is flagged and not corrected.
- Marketable security (16A): a security capable of being traded in any stock exchange in India.
- Market value (16B): in relation to an instrument through which (a) any security is traded in a stock exchange, the price at which it is so traded; (b) any security is transferred through a depository but not traded in the stock exchange, the price or the consideration mentioned in the instrument; (c) any security is dealt otherwise than in the stock exchange or depository, the price or consideration mentioned in the instrument.
A worked example
Kaveri Industries Limited has shares listed on a recognised stock exchange. On a given day, 100 of its shares are bought through the exchange at Rs 250 each. Under clause (16B)(a), the market value of those shares is the price at which they were traded, so Rs 250 each. If instead a shareholder moves the same shares through a depository to a buyer off the exchange for a consideration stated in the transfer, clause (16B)(b) uses the price or consideration mentioned in that instrument. If the shares are sold in a private deal outside both the exchange and the depository, clause (16B)(c) again uses the price or consideration mentioned. The route chosen decides which sub-clause applies. The percentage payable is not worked out here; it comes from the central Schedule's Articles for these securities, covered in separate articles.
Need help with share and security transfers?
The route a security takes, through an exchange, through a depository or outside both, decides how its value is measured for duty. If you are transferring shares or planning an issue and want the instrument and the route checked, our share transfer team can help you through the steps.
Key takeaways
- "Securities" includes securities under the Securities Contracts (Regulation) Act, 1956, a derivative as defined in the RBI Act, 1934, short-term debt instruments, and anything notified.
- "Stock exchange" and "depository" can be widened by Central notification.
- A "debenture" is defined at length and is excluded from "bond".
- "Market value" turns on the route: exchange price, or the price or consideration in the instrument.
- The copy prints "issue" where "issuer" appears intended, "debenturte" and "ma specify"; each is flagged here.
Read next
- Section 9A of the Indian Stamp Act, 1899: stamp duty on sale, transfer and issue of securities through a stock exchange and depository
- Section 9B of the Indian Stamp Act, 1899: stamp duty on issue and off-market transfer of securities
- Section 8A of the Indian Stamp Act, 1899: securities issued to and held through a depository
- Stamp duty on share transfer deed
Disclaimer: Based on the consolidated text of the Indian Stamp Act, 1899 published by the Department of Revenue, whose latest amendment shown is Act 13 of 2021, as consulted on 2 October 2026. Only the central text is covered: stamp duty on most instruments is fixed by the law and schedule of the State where the instrument is executed, and State amendments, rules, notifications and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.