I have a few co’s physical shares & I want these to be dematerialized for trading. I have Demat account also & am using the same currently for all practical purpose.
The only problem is that the joint share holder of the physical shares is different than that of Demat account I have. I was a bachelor, applied the shares in that capacity i.e. individual capacity, got married, applied the shares jointly with my wife, had one then two sons later on & applied the shares with their names. Now I am having shares in the following order:
1. In individual capacity,
2. Jointly with my wife,
3. Jointly with my one son,
4. Jointly with other son,
5. Similar order for my wife also.
The concept of Demat was introduced much later on & now I am stuck up with these physical shares, hence the query arose. Now these shares 1st have to be transferred in the same joint holder order, as that of my Demat a/c’s. My query relates to:
1. The shares are in the name of my family members only & there is no consideration for transfer,
2. The transfer is being effected for Demat thereafter,
3. What should be the consideration to be written in the ‘Transfer Deed’,
4. Would these shares being sent for transfer, attract ‘Stamp Duty’ for transfer,
5. If yes, the rate i.e. 0.25% of the current market value, would apply,
6. One of the registrars has suggested that market value has nothing to do with the share transfer; the consideration has to be actual consideration at the time of transfer, which in this case is NIL, therefore, hence, NIL ‘Stamp Duty.
What is the correct procedure to be followed?
1. NIL ‘Stamp Duty’,
2. 0.25% ‘Stamp Duty’ as per the current market value OR
3. Any other procedure can be adapted?
The question is not because of ‘Stamp Duty’ which is very nominal, but academic in nature for knowledge of an ordinary investor like me.