Author: CS Siddharth Khandelwal, Shraddha Kelaskar
Published in: Taxmann
The article clarifies that despite the centralisation of stamp duty on securities transactions after 1 July 2020, state stamp laws—particularly under the Maharashtra Stamp Act, 1958—continue to apply to transaction documents like SPAs, SHAs and SSAs. While transfer of securities in demat form attracts centrally collected duty, underlying agreements must be independently evaluated based on their substance and legal effect. Instruments such as SPAs and SSAs often attract stamp duty (typically ~0.20%) if they create enforceable monetary rights, whereas SHAs may attract nominal or higher duty depending on embedded rights. Incorrect stamping can lead to inadmissibility, penalties and delays. The article emphasises a substance-over-form approach and proactive compliance to mitigate legal and commercial risks in M&A and investment transactions.
