Section 9A 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.
Part AA of Chapter II, which contains sections 9A and 9B, sets up a collection system for stamp duty on securities. Section 9A covers securities sold through a stock exchange, transferred by a depository for a consideration, or issued with a change in a depository's records. Instead of the parties stamping an instrument, the exchange, clearing corporation or depository collects the duty on behalf of the State Government. This article covers sub-sections (1) to (3); sub-sections (4) and (5) are in a sibling article.
Under section 9A(1), duty is collected on behalf of the State Government (a) from the buyer by the stock exchange or an authorised clearing corporation on a sale through the exchange, on the market value of the securities; (b) from the transferor by a depository, on the consideration amount, for a transfer for consideration made by a depository outside such a sale; and (c) from the issuer by the depository, on the total market value in the allotment list. The rate is the one in Schedule I and the instruments need not be stamped.
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. For debentures and the transfer of shares, section 9(2)(a) names the Central Government as "the Government", and the rate is the one the central Schedule prints; any reduction or remission under section 9 and later amendments should be checked. For help with share transactions in practice, see our share transfer service.
Part AA was inserted by Act 7 of 2019, section 15, with effect from 1 July 2020, and the footnote adds that it was earlier notified with effect from 9 January 2020 followed by 1 April 2020. The defined terms (clearance list, clearing corporation, allotment list, depository, market value) are in the securities definitions article.
Section 9A(1): who collects, from whom, on what
The sub-section opens "Notwithstanding anything contained in this Act". It then gives three situations.
| Clause | Event | Collected by | From | On what |
|---|---|---|---|---|
| (a) | Sale of securities, whether delivery based or otherwise, made through a stock exchange | The stock exchange or a clearing corporation authorised by it | The buyer | The market value of the securities at the time of settlement of transactions in securities of such buyer, for each sale in the clearance list |
| (b) | Transfer of securities for a consideration, whether delivery based or otherwise, made by a depository otherwise than on the basis of a transaction in (a) | The depository | The transferor | The consideration amount specified in the transfer |
| (c) | Creation or change in a depository's records pursuant to an issue of securities | The depository | The issuer | The total market value of the securities in the allotment list |
In each case the duty is collected "on behalf of the State Government" and "in such manner as the Central Government may, by rules, provide". The rules are not in the text consulted, so no procedure is described here. Our post on securities in dematerialised form covers the depository system generally and does not depend on this Act.
Points worth noticing:
- Buyer or transferor. In (a) the buyer bears the collection; in (b) it is the transferor. The Act does not leave this to agreement between the parties.
- The words "whether delivery based or otherwise" appear in (a) and (b), so the character of the settlement does not take a trade out of the section.
- The base differs. In (a) and (c) it is market value; in (b) it is the consideration amount specified. Section 2(16B) fixes "market value" by route.
Section 9A(2): rate in Schedule I, and no stamping
Sub-section (2) says: "Notwithstanding anything contained in this Act, the instruments referred to in sub-section (1) shall be chargeable with duty as provided therein at the rate specified in Schedule I and such instruments need not be stamped."
A proviso, inserted by Act 12 of 2020, section 143, with effect from 1 April 2020, says "no such duty shall be chargeable in respect of the instruments of transaction in stock exchanges and depositories established in any International Financial Services Centre set up under section 18 of the Special Economic Zones Act, 2005 (28 of 2005)". The proviso is tied to the Centre in which the exchange or depository is established.
The Schedule I Articles for these transactions are 27 (debentures) and 56A (securities other than debentures); both carry the words "see sections 9A and 9B". The central Schedule prints these percentages:
| Article | Head | The central Schedule prints |
|---|---|---|
| 27(a) | Issue of debenture | 0.005% |
| 27(b) | Transfer and re-issue of debenture | 0.0001% |
| 56A(a) | Issue of security other than debenture | 0.005% |
| 56A(b) | Transfer of security other than debenture on delivery basis | 0.015% |
| 56A(c) | Transfer of security other than debenture on non-delivery basis | 0.003% |
The copy prints the duty column of Article 56A out of line with its descriptions, so the percentages above are read in the order in which they are printed against the nine rows; the official text should be checked. Debentures and transfer of shares are instruments for which the Central Government is "the Government" under section 9(2)(a), and any reduction or remission under section 9 and later amendments should be checked. These percentages are covered in full in the Schedule I article on Articles 27 and 56A.
Section 9A(3): no State duty on the related papers
Sub-section (3) reads: "From the date of commencement of this Part, no stamp-duty shall be charged or collected by the State Government on any note or memorandum or any other document, electronic or otherwise, associated with the transactions mentioned in sub-section (1)."
The section gives no date of its own for "the date of commencement of this Part". The date the footnote gives for the insertion of the Part is 1 July 2020. The sub-section stops the State Government from charging duty a second time on the contract notes and similar documents that go with these trades. Section 4(3) works in the same direction by making the section 9A instrument the principal one and charging nothing on the other instruments in the transaction.
A worked example using Schedule I percentages
Hemant buys listed shares worth Rs 1,00,000 (market value at settlement) through a stock exchange on a delivery basis. Under section 9A(1)(a), the exchange or its authorised clearing corporation collects the duty from Hemant, on market value. If the central Schedule's Article 56A(b) percentage of 0.015% applies to this trade, the duty is 0.015% of Rs 1,00,000, which is Rs 15. For a transaction on a non-delivery basis, the percentage printed for 56A(c) is 0.003%, so Rs 3 on the same value. The money is held on behalf of the State Government and handed over under sub-section (4), covered in the sibling article. No stamp is bought and no contract note is stamped. Check whether any reduction or remission under section 9 applies.
Need help with a share or security transaction?
If you are buying, selling or issuing shares or debentures and want to be sure which route applies and which documents carry duty, our share transfer team can help you work through the transaction before it settles.
Key takeaways
- Section 9A(1) names three collection events: sale through a stock exchange, transfer by a depository, and issue with a change in depository records.
- The exchange, clearing corporation or depository collects on behalf of the State Government.
- The buyer pays on a sale through an exchange; the transferor on a depository transfer; the issuer on an issue.
- The rate is the one in Schedule I and the instruments need not be stamped.
- Instruments of transactions in an International Financial Services Centre are carved out by the proviso.
- The rules for the manner of collection are not in the text consulted.
Read next
- Sections 9A and 62A of the Indian Stamp Act, 1899: remitting duty to the States, reporting and penalty
- 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.