Dear Sir,
You may purchase non judicial stamps from local banks or lower authorized vendors in your State. The following information answered all your questions raised.
Shares are moveable property
The Section 82 of the Companies Act mentions that shares are movable property and transferable in the manner prescribed by the Articles of Association of the company. Shares of public limited companies are freely transferable. A duly executed and stamped transfer deed transfers ownership of shares by delivery of transfer deed along with share certificate.
In olden days blank transfers were prevailing and the instrument of transfer is never stamped by the executants i.e. (transferors). In this article the provisions of Stamp Act as well as Companies Act are analysed.
Legal frame work for levy/payment of stamp duty
a. Why stamp duty is collected: The main objective of Indian Stamp Act, 1899 is to raise revenue for the government. The instruments which are duly stamped as per Schdule-1 are admissible as evidence in a court of law. For this reason, stamping of document with correct value assumes significance.
b. Field of legislation: Vide 91 of Union list, the central government is empowered to collect stamp duty of certain instruments namely, bills of exchange, promissory notes, transfer forms for transfer of shares, debentures, bills of lading, proxies, letters of credit and receipts. State governments do not have any power to enact any laws for payment of stamp duty in respect of these instruments. Each state will prescribe stamp duty on those instruments which fall within its list and they are reflected in Schedule-1A.
c. How stamp duty is calculated: The instruments mentioned in Schedule -1 can be classified into three types. The first category refers to those instruments on which stamp duty as mentioned in the Schedule-1 is payable irrespective of the value mentioned in those documents. For instance: Memorandum of Association of a company, Notarial Act, etc. The second category attracts stamp duty on the basis of value specified in those instruments for eg, gift deed, lease deed. The third category attracts stamp duty on the basis the consideration mentioned in the documents or market value whichever is higher. For eg: Sale deed, transfer deed, etc.
d. How stamp duty is payable: Non judicial stamp papers are generally used for execution of legal documents such as sale deed, lease deed, etc. In some cases adhesive stamps are used for eg: Notarial acts, share transfer stamps. After the Telgi scam, franking of the value on the instruments has come into usage. Having addressed the above basic legal frame work on levy of stamp duty, now let us focus on the main issue of stamp duty on transfer of shares.