Uniform Stamp Duty
Stamp duty will be charged uniformly irrespective of the state of residence effective from July 1st, 2020 via this notification. Until now, stamp duty was charged at different rates based on your resident state. We (brokerage firms) used to collect from you and pay it monthly to the respective state government. Going forward we will collect and pay it to the exchanges who will, in turn, pass it back to the central government.
Check this link to see how much you were paying until now. Most states were charging in the range of Rs 200 to Rs 300 per crore for intraday/derivatives and Rs 1000 per crore for equity delivery trades. Some states like Telangana, Haryana, etc. had a maximum cap per contract note on the stamp duty.
|Type of trade||New stamp duty rate|
|Delivery equity trades||0.015% or Rs 1500 per crore on buy-side|
|Intraday equity trades||0.003% or Rs 300 per crore on buy-side|
|Futures (equity and commodity)||0.002% or Rs 200 per crore on buy-side|
|Options (equity and commodity)||0.003% or Rs 300 per crore on buy-side|
|Currency||0.0001% or Rs 10 per crore on buy-side|
|Mutual funds||0.005% or Rs 500 per crore on buy-side|
|Bonds||0.0001% or Rs 10 per crore on buy-side|
In the 2019-20 Union Budget, stamp duty was made uniform across all states. Check Page 14 on the finance bill. Here are the links to the circulars from various exchanges: Equity, Futures & Options, Currency, Offer for Sale, Offer for Takeover/Delisting/Buy-back, and Commodity. We will update the latest stamp duty on our brokerage calculator from July 1st.
How does it compare to old rates
The new rates are only on the buy-side and not on both buy and sell-side. So stamp duty costs for most of you will reduce by over 50%. Active traders who were residing in states which had a cap on maximum stamp duty per day per contract note, will not enjoy the benefit of the cap going forward, hence will be negatively affected. There was no stamp duty earlier for offline transfer of shares or mutual funds using DIS (delivery instruction slip), now there will be based on the consideration amount entered on the DIS slip at the same rates as delivery trades (0.015% or Rs 1500 per crore on buy-side).
How does it affect Mutual fund transactions
Stamp duty of 0.005% will be charged on your mutual fund purchase. The applicable stamp duty will be adjusted with the units allotted to you rather than being separately charged.
Assume you intend to invest Rs.10,000/- in a fund, then the applicable stamp duty is – Rs.10,000 * 0.005% = 0.5 (50 Paisa)
Hence your investment amount is adjusted for stamp duty and gets reduced to Rs.9,999.5/.
The number of units you get is – Rs.9,999.5 / 10 = 999.95.
You can read about mutual fund transactions in more detail here.