Section 8A 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.
Section 8A of the Indian Stamp Act, 1899 deals with securities that are issued to, or held through, a depository. It does two things. For an issuer that issues securities to one or more depositories, duty is chargeable on the total amount issued and the securities need not be stamped. For the transfer of registered ownership between a person and a depository, or between a depository and a beneficial owner, no duty is payable.
The heading says "Securities dealt in depository not liable to stamp duty", but the section has two limbs. Under (a), the issuer is chargeable with duty on the total amount of securities issued to one or more depositories, and the securities need not be stamped. Under (b), the transfer of registered ownership from a person to a depository, or from a depository to a beneficial owner, is not liable to duty. The section was substituted by Act 7 of 2019, section 14.
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 anything outside the securities rules; debentures and transfers of shares are among the instruments for which section 9(2)(a) names the Central Government as "the Government". If you are planning an issue of shares or debentures that will be held in dematerialised form, our share transfer support can help you plan the steps.
The section applies "Notwithstanding anything contained in this Act or any other law for the time being in force". So it prevails over contrary provisions in this Act and in other laws.
The text and its history
The footnote shows that section 8A was substituted by Act 7 of 2019, section 14, with effect from 1 July 2020, and adds "". The copy consulted prints the footnote numbers out of step on this page (the footnotes numbered 4 and 5 belong to the markers on sections 8A and 8B), so the official text should be checked if the exact footnote matters to you. The meanings of "securities", "depository" and "issue" come from section 2 and are covered in the article on the securities definitions.
Clause (a): the issuer pays on the total amount issued
Clause (a) says "an issuer, by the issue of securities to one or more depositories, shall, in respect of such issue, be chargeable with duty on the total amount of securities issued by it and such securities need not be stamped".
Three points follow from the words:
- Who pays: the issuer. The section charges the issuer, not the investor.
- On what: the "total amount of securities issued by it". The text does not say whether this is face value, issue price or market value, and this article does not choose among them. Section 2(16B) defines "market value" and sections 9A and 9B use it for other charging provisions.
- What follows: the securities need not be stamped. The duty is paid on the issue as a whole and the individual securities do not each carry a stamp.
Section 8A does not state a rate or name an Article of Schedule I. The charging rules for an issue through a depository also appear in section 9A(1)(c), where the duty on the allotment list is collected from the issuer by the depository, and the rates for securities come from Schedule I. The two provisions are printed side by side in the text consulted and are not reconciled here. See the sibling article on section 9A.
Clause (b): transfers to and from a depository
Clause (b) provides that "the transfer of registered ownership of securities from a person to a depository or from a depository to a beneficial owner shall not be liable to duty". It has two directions:
- from a person to a depository, and
- from a depository to a beneficial owner.
No other direction is mentioned in the clause. A transfer between two beneficial owners, or between depositories, is not covered by the words of clause (b); transfers for consideration through a depository are dealt with in section 9A(1)(b).
The Explanation
The Explanation says: "For the purposes of this section, the expression 'beneficial ownership' shall have the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996)". A printing point: the Explanation defines "beneficial ownership", while clause (b) uses the words "beneficial owner". The copy prints both as shown and this article does not harmonise them. The meaning in the Depositories Act is not explained here; see our post on beneficial owner and registered owner for the depository system.
The two limbs side by side
| Limb | Who or what | Result |
|---|---|---|
| (a) | Issuer issuing securities to one or more depositories | Chargeable with duty on the total amount of securities issued; securities need not be stamped |
| (b) | Transfer of registered ownership from a person to a depository | Not liable to duty |
| (b) | Transfer of registered ownership from a depository to a beneficial owner | Not liable to duty |
A worked example
Orion Components Limited issues 1,00,000 equity shares, all credited to a depository account at issue. Under clause (a), Orion is chargeable with duty on the total amount of the securities issued by it, and no certificate needs a stamp. Meera, an existing shareholder holding her shares in the company's records in her own name, asks for them to be held in the depository. The move of registered ownership from Meera to the depository is not liable to duty under clause (b). Later, if the shares are moved from the depository back to Meera as beneficial owner, clause (b) again says that transfer is not liable to duty. If Meera instead sells the shares to a buyer for a consideration, that sale is a different event and is dealt with in sections 9A and 9B.
The rate on Orion's issue is not given by section 8A. It comes from the central Schedule's Articles for securities, covered in separate articles, and any reduction or remission under section 9 should be checked.
Need help with an issue or a move into demat?
Issuers, promoters and shareholders often ask which of these steps attract duty and which do not. If you are planning an allotment, a dematerialisation or a transfer and want the steps and documents checked, our share transfer team can walk through them with you.
Key takeaways
- Section 8A was substituted by Act 7 of 2019, section 14, with effect from 1 July 2020 as the footnote shows.
- The issuer is chargeable on the total amount of securities issued to a depository; the securities need not be stamped.
- A transfer of registered ownership from a person to a depository, or from a depository to a beneficial owner, is not liable to duty.
- The Explanation defines "beneficial ownership" while the clause says "beneficial owner"; the copy prints it that way.
- The section does not state the rate; check Schedule I and the current position.
Read next
- Section 2 of the Indian Stamp Act, 1899: securities, stock exchange, depository, debenture and market value
- Section 9A of the Indian Stamp Act, 1899: stamp duty on sale, transfer and issue of securities
- Section 9B of the Indian Stamp Act, 1899: stamp duty on issue and off-market transfer of securities
- Demat shares for private companies: mandatory guide
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.