When a company increases its authorised share capital in Karnataka, stamp duty is payable on the Notice of Increase (Form SH-7) as per the Karnataka Stamp Act, 1957. The applicable rate is 0.15% of the amount by which the authorised capital is increased, subject to a minimum of ₹500. This applies to all companies — Private Limited, Public Limited, and One Person Companies — registered in Karnataka. Taxocity helps companies complete this process end-to-end with 100% compliance.

• Stamp duty rate in Karnataka: 0.15% of the incremental authorised capital
• Minimum stamp duty payable: ₹500
• Filing requirement: Form SH-7 on MCA portal within 30 days of passing the ordinary resolution

What is Authorised Share Capital?

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

As the business grows, companies often need to increase their authorised share capital — to raise fresh funds, bring in new investors, or issue ESOPs. This increase requires a formal resolution of shareholders and filing with the Ministry of Corporate Affairs (MCA), along with payment of the applicable stamp duty in the state where the registered office is situated.

Stamp Duty Rate in Karnataka (2026)

Karnataka levies stamp duty on the increase in authorised share capital under the Karnataka Stamp Act, 1957. The duty is payable when a company files Form SH-7 with the Registrar of Companies (RoC), Bengaluru.

Parameter	Details
Applicable Act	Karnataka Stamp Act, 1957
Stamp Duty Rate	0.15% of the increase in authorised capital
Minimum Stamp Duty	₹500
Form to File	Form SH-7 (MCA Portal)
Time Limit for Filing	Within 30 days of passing the ordinary resolution
Payment Mode	Online via MCA portal (e-stamp)

Calculation Example

Suppose a company wants to increase its authorised share capital from ₹10 lakhs to ₹50 lakhs (an increase of ₹40 lakhs):

• Increase in authorised capital = ₹40,00,000
• Stamp duty = 0.15% × ₹40,00,000 = ₹6,000

For a larger company increasing capital from ₹1 crore to ₹5 crore (increase of ₹4 crore), the stamp duty would be 0.15% × ₹4,00,00,000 = ₹60,000.

Stamp Duty Comparison: Karnataka vs Other States

Stamp duty rates on increase in authorised share capital vary significantly across Indian states. Here is how Karnataka compares with other major states:

State	Stamp Duty Rate	Notes
Karnataka	0.15%	Min ₹500
Maharashtra	0.2%	On increased amount
Delhi	0.1%	Min ₹500
Tamil Nadu	0.2%	On increased amount
Telangana	0.2%	On increased amount
Gujarat	0.1%	Min ₹1,000
West Bengal	0.1%	On increased amount
Rajasthan	0.15%	On increased amount

For a full comparison across all Indian states, refer to Taxocity's state-wise stamp duty guide.

Step-by-Step Process to Increase Authorised Share Capital in Karnataka (2026)

Step 1: Check the Articles of Association (AoA)

Before proceeding, verify that your company's Articles of Association contain provisions authorising the company to increase its share capital. If not, you must first amend the AoA through a special resolution.

Step 2: Hold a Board Meeting

Convene a Board of Directors meeting and pass a board resolution recommending the increase in authorised share capital. Fix a date for the Extraordinary General Meeting (EGM) or pass the resolution by circulation, wherever permitted.

Step 3: Pass an Ordinary Resolution

Hold an EGM or pass an ordinary resolution through a General Meeting to approve the increase. The shareholders must approve the change by a simple majority. Note the date of the resolution — the 30-day filing clock starts here.

Step 4: File Form SH-7 on the MCA Portal

File Form SH-7 (Notice of Alteration of Share Capital) with the Registrar of Companies, Karnataka (Bengaluru) within 30 days of passing the resolution. Attach the following documents:

• Certified true copy of the ordinary resolution
• Altered Memorandum of Association (MoA)
• Altered Articles of Association (AoA), if applicable
• Notice of the General Meeting

Step 5: Pay Stamp Duty

During the filing of Form SH-7 on the MCA portal, stamp duty is collected electronically. The system calculates the duty at 0.15% of the increase in authorised capital. Payment can be made via net banking, debit/credit card, or NEFT/RTGS.

Step 6: RoC Approval and Updated Certificate

Once the form is filed and fees are paid, the RoC reviews the application. On successful processing, the MCA portal reflects the updated authorised capital. You should keep a printed record of the SRN (Service Request Number) and the acknowledgement.

Documents Required

• Board Resolution approving the increase
• Notice of the General Meeting / Postal Ballot Notice
• Ordinary Resolution passed at the EGM or AGM
• Altered Memorandum of Association (MoA) — updated capital clause
• Altered Articles of Association (AoA), if articles were also amended
• Attendance sheet and minutes of the General Meeting
• DSC (Digital Signature Certificate) of the authorised director

MCA Fees for Filing Form SH-7

In addition to stamp duty, companies must also pay MCA Government filing fees when submitting Form SH-7. The fees are based on the company's post-increase authorised capital:

Authorised Share Capital (After Increase)	MCA Government Fee
Up to ₹1,00,000	₹200
₹1,00,001 to ₹5,00,000	₹300
₹5,00,001 to ₹10,00,000	₹400
₹10,00,001 to ₹50,00,000	₹500
₹50,00,001 to ₹1,00,00,000	₹1,500
Above ₹1,00,00,000	₹2,000 + additional fees per ₹10 lakh or part thereof

The total cost of increasing authorised share capital in Karnataka = MCA Government filing fee + Stamp duty (0.15% of increase) + Professional fees (if applicable).

Penalty for Late Filing of Form SH-7

If Form SH-7 is not filed within 30 days of the resolution, additional fees become payable as per Section 403 of the Companies Act, 2013. The penalty structure is as follows:

• Up to 30 days late: 2x the normal government fee
• 30 to 60 days late: 4x the normal government fee
• 60 to 90 days late: 6x the normal government fee
• 90 to 180 days late: 10x the normal government fee
• Beyond 180 days: 12x the normal government fee

Timely filing is critical to avoid these escalating penalties. Taxocity's compliance team ensures your filing is done within the deadline — every time.

Why Increase Authorised Share Capital?

Companies in Karnataka — especially startups in Bengaluru — frequently need to increase their authorised capital to support growth. Common reasons include:

• Fundraising: To issue new shares to angel investors, venture capital firms, or in an IPO, the company must have sufficient authorised capital headroom.
• ESOP Issuance: Employee Stock Option Plans require additional authorised capital to cover the options granted to employees.
• Bonus Shares: Issuing bonus shares to existing shareholders without cash payment requires sufficient authorised capital.
• Rights Issue: Offering new shares to existing shareholders at a discounted price requires unused authorised capital.
• Business Expansion: As the company scales, higher authorised capital signals financial strength to lenders and partners.

How Taxocity Helps

Taxocity, with over 3 decades of experience in corporate compliance, handles the entire process of increasing authorised share capital for companies in Karnataka — from drafting the board resolution and EGM notice to filing Form SH-7, paying stamp duty, and obtaining RoC acknowledgement.

• End-to-end support: board resolution to RoC filing
• 100% compliance guarantee
• Real human experts available — not just automated workflows
• 4.8/5 rating from 5,000+ reviews
• Trusted by startups and established companies in Bengaluru and across Karnataka

Whether you are a Private Limited Company, One Person Company, or a Limited Liability Partnership looking for compliance services, Taxocity provides the right support at every stage of your business journey.

Key Takeaways

• Stamp duty on increase in authorised share capital in Karnataka is 0.15% of the incremental amount, with a minimum of ₹500.
• Filing must be done via Form SH-7 on the MCA portal within 30 days of the resolution.
• Both MCA government fees and state stamp duty are payable at the time of filing.
• Late filing attracts heavy penalties — up to 12x the normal government fee.
• Stamp duty in Karnataka (0.15%) is competitive compared to Maharashtra and Tamil Nadu (both 0.2%).
• Taxocity provides end-to-end support for the entire process with a 100% compliance guarantee.

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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 compliance requirements are subject to change by government authorities. Please consult a qualified tax advisor or company secretary before making any decisions regarding your company's share capital or compliance filings.