When a company increases its authorised share capital, it must pay stamp duty on the altered Memorandum of Association (MoA). This duty varies significantly by state, ranging from 0.1% to 0.5% of the increased amount, and is payable before or alongside filing Form SH-7 with the Registrar of Companies. Companies registered under the Companies Act, 2013 — including private limited, public limited, and OPCs — must comply. Stamp duty is a one-time, state-level levy on the incremental capital, not on the total authorised capital.

What is Authorised Share Capital?

Authorised share capital (also called "nominal capital") is the maximum amount of share capital a company is legally permitted to issue to shareholders. It is stated in the Memorandum of Association at the time of incorporation.

As a company grows, it may need to issue new shares beyond its original authorised limit. Before doing so, the company must pass an ordinary resolution to increase its authorised share capital, amend its MoA, and file Form SH-7 with the MCA — along with the applicable stamp duty to the relevant state government.

Why Stamp Duty is Payable on This Increase

The Memorandum of Association is treated as an instrument under the Indian Stamp Act, 1899, and respective State Stamp Acts. When the MoA is altered to reflect a higher authorised capital, a fresh stamp duty liability arises on the amount of increase (not the total authorised capital).

This duty is payable to the state government where the company's registered office is located. It must be paid before or at the time of filing Form SH-7 on the MCA portal — failure to pay results in non-compliance and potential penalties.

Step-by-Step Process to Increase Authorised Share Capital

1. Check the Articles of Association (AoA) — confirm that increasing authorised capital is permitted without amending AoA
2. Issue a Board Meeting Notice and pass a Board Resolution to convene an EGM/pass via postal ballot
3. Pass an Ordinary Resolution at the EGM to increase authorised share capital
4. Pay stamp duty on the increase as per the state rate (see table below)
5. File Form SH-7 on the MCA portal within 30 days of passing the resolution
6. Attach the altered MoA, resolution copy, and stamp duty payment proof
7. Receive updated Certificate of Incorporation reflecting new authorised capital

Note: Filing must happen within 30 days of the resolution. Late filing attracts additional ROC fees and Section 450 penalties under the Companies Act, 2013.

State-wise Stamp Duty Rates (2026)

Stamp duty on increase in authorised share capital differs from state to state. The table below lists the applicable rates across major Indian states. These rates apply on the amount of increase in authorised share capital:

State	Stamp Duty Rate	Basis	Notes
Maharashtra	0.2%	On the amount of increase	Payable via e-SBTR or franking
Delhi	0.1%	On the amount of increase	One of the lowest rates in India
Karnataka	0.15%	On the amount of increase	Payable via SHCIL or e-stamp
Tamil Nadu	0.2%	On the amount of increase	Stamp paper or e-stamp accepted
Telangana	0.2%	On the amount of increase	Paid via stamp paper
Andhra Pradesh	0.2%	On the amount of increase	Follows AP Stamp Act
Gujarat	0.1%	On the amount of increase	Subject to a minimum duty
Rajasthan	0.25%	On the amount of increase	Higher than most states
Uttar Pradesh	0.2%	On the amount of increase	Payable at treasury/e-stamp
West Bengal	0.1%	On the amount of increase	—
Punjab	0.1%	On the amount of increase	—
Haryana	0.1%	On the amount of increase	—
Madhya Pradesh	0.15%	On the amount of increase	e-stamp available
Kerala	0.2%	On the amount of increase	—
Himachal Pradesh	0.1%	On the amount of increase	—
Jharkhand	0.1%	On the amount of increase	—
Odisha	0.2%	On the amount of increase	—
Chhattisgarh	0.15%	On the amount of increase	—
Assam	0.2%	On the amount of increase	—
Goa	0.1%	On the amount of increase	—
Bihar	0.2%	On the amount of increase	—
Uttarakhand	0.2%	On the amount of increase	—
Tripura	0.1%	On the amount of increase	—
Meghalaya	0.1%	On the amount of increase	—
Manipur	0.1%	On the amount of increase	—
Nagaland	0.1%	On the amount of increase	—
Mizoram	0.1%	On the amount of increase	—
Sikkim	0.1%	On the amount of increase	—
Arunachal Pradesh	0.1%	On the amount of increase	—

Important: Stamp duty rates are subject to change by state governments. Always verify with the current state stamp schedule or a compliance expert before filing. States like Maharashtra and Rajasthan have historically had higher rates than Delhi or Gujarat.

ROC Fees on Form SH-7

Apart from stamp duty, companies must also pay ROC filing fees on Form SH-7. These are separate central government fees charged on the nominal capital slab:

Nominal Capital (Authorised Capital)	Fee (Rs.)
Up to Rs. 1,00,000	Rs. 200
Rs. 1,00,001 to Rs. 5,00,000	Rs. 300
Rs. 5,00,001 to Rs. 10,00,000	Rs. 400
Rs. 10,00,001 to Rs. 50,00,000	Rs. 500
Rs. 50,00,001 to Rs. 1,00,00,000	Rs. 1,500
Rs. 1,00,00,001 to Rs. 5,00,00,000	Rs. 5,000
Rs. 5,00,00,001 to Rs. 10,00,00,000	Rs. 10,000
Above Rs. 10,00,00,000	Rs. 50,000 + Rs. 10,000 for every Rs. 10,00,00,000 or part thereof

These MCA fees are standardised across India and do not vary by state. The total cost of increasing authorised share capital = State Stamp Duty + MCA ROC Fees + Professional Fees.

Example Calculation: Maharashtra vs. Delhi

Consider a company increasing its authorised share capital from Rs. 10 lakhs to Rs. 50 lakhs (an increase of Rs. 40 lakhs):

Component	Maharashtra (0.2%)	Delhi (0.1%)
Increase in Capital	Rs. 40,00,000	Rs. 40,00,000
Stamp Duty	Rs. 8,000	Rs. 4,000
ROC Fee (SH-7)	Rs. 1,500	Rs. 1,500
Total Government Fee	Rs. 9,500	Rs. 5,500

This illustrates how the state of registration can significantly affect compliance costs, especially for large capital increases. Companies in higher-duty states like Rajasthan (0.25%) pay considerably more than those in low-duty states like Delhi or Gujarat.

Key Compliance Points to Remember

• Stamp duty is on the increase, not total capital: You only pay on the incremental amount added to authorised capital.
• State of registered office governs stamp duty: Regardless of where operations happen, the duty is payable in the state where the registered office is located.
• Form SH-7 must be filed within 30 days of passing the ordinary resolution — late filing attracts additional fees.
• Stamp duty must be paid before filing: The MCA portal requires proof of stamp duty payment or e-stamping at the time of submission.
• Director's DSC is required for digital signing of Form SH-7 on the MCA portal.
• AoA amendment may be needed: If the AoA does not permit capital increase without EGM, a special resolution for AoA amendment must accompany.

Common Mistakes to Avoid

• Paying stamp duty on total authorised capital instead of just the increased amount
• Missing the 30-day window to file Form SH-7, leading to penalty fees
• Ignoring state-specific stamp duty schedules (especially when company relocates its registered office to a new state)
• Not updating the physical share certificates to reflect new capital structure post-approval
• Forgetting to amend the AoA if it restricts the method of increasing authorised capital

How Taxocity Helps You Increase Authorised Share Capital

Taxocity has been helping Indian businesses with company compliance for over three decades. Our team of real human experts manages the entire process — from drafting board resolutions and EGM notices, to calculating the correct stamp duty for your state, filing Form SH-7 on the MCA portal, and obtaining the updated Certificate of Incorporation.

With a 100% compliance guarantee and a proven track record (4.8/5 from 5,000+ reviews), Taxocity ensures your capital increase is completed accurately and on time — so you can focus on scaling your business.

Our end-to-end support covers:

• Board and EGM resolution drafting
• State-specific stamp duty calculation and payment guidance
• Form SH-7 preparation and MCA filing
• Updated MoA and certificate of incorporation
• Post-compliance records update

Whether you're a startup scaling up or an established private limited company preparing for investor funding, our compliance experts ensure zero delays and zero errors.

Related Services

• Private Limited Company Registration
• One Person Company Registration
• LLP Registration
• Startup India Registration
• GST Registration

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Disclaimer: This article is intended for general informational purposes only and does not constitute tax, legal, or financial advice. Stamp duty rates and regulatory requirements are subject to change by respective state governments and the Ministry of Corporate Affairs. Please consult a qualified compliance advisor or tax professional before making any compliance-related decisions for your business.