In Tamil Nadu, the stamp duty applicable on the increase in authorised share capital is 0.15% of the amount by which the authorised share capital is increased. This is levied under the Tamil Nadu Stamp Act and is payable before filing Form SH-7 with the Ministry of Corporate Affairs (MCA). Companies registered in Tamil Nadu must pay this duty at the time of executing the Articles of Association (AOA) amendment and the notice to the Registrar of Companies (ROC). Taxocity provides end-to-end support for authorised capital increases, from stamp duty calculation to ROC filing.

• Stamp duty rate: 0.15% on the incremental authorised capital amount
• Applicable form: Form SH-7 (filed with MCA within 30 days of passing special resolution)
• Payment mode: e-Stamp paper or franking via Tamil Nadu Government designated agencies

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, as stated in its Memorandum of Association (MOA). It is not the actual paid-up capital but rather the upper ceiling a company sets for future fundraising.

A company can issue shares only up to this limit. To issue additional shares beyond the authorised limit, the company must first increase its authorised share capital by amending its MOA and filing the required forms with the ROC. This process attracts stamp duty in every state, including Tamil Nadu.

Stamp Duty Rate in Tamil Nadu (2026)

Under the Tamil Nadu Stamp Act and Article 10 of Schedule I-A (as applicable to share capital instruments), the rate of stamp duty for increase in authorised share capital is as follows:

Particulars	Rate / Details
Stamp Duty Rate	0.15% of the amount of increase in authorised share capital
Minimum Stamp Duty	Varies - subject to state notification (typically ₹500 minimum)
Maximum Cap	No upper cap (unlike some other states)
Mode of Payment	e-Stamp paper / Franking through authorised banks
Applicable Law	Tamil Nadu Stamp Act, 1899 (as amended)

Illustrative Examples

Increase in Authorised Capital	Stamp Duty Payable (@ 0.15%)
₹5,00,000	₹750
₹10,00,000	₹1,500
₹50,00,000	₹7,500
₹1,00,00,000 (₹1 Crore)	₹15,000
₹5,00,00,000 (₹5 Crore)	₹75,000
₹10,00,00,000 (₹10 Crore)	₹1,50,000

Note: The above calculations are illustrative. Always confirm the exact duty payable with a compliance expert before filing, as the state government may revise rates via notifications.

Why Do Companies Increase Authorised Capital?

Increasing authorised share capital is a routine corporate compliance activity undertaken for various strategic and operational reasons:

• Attracting investors or venture capital: Investors typically require a higher authorised capital base before injecting funds or taking equity.
• Issuing ESOPs: Employee Stock Option Plans require sufficient headroom in the authorised capital.
• Conversion of debt to equity: Startups and growing businesses often convert loans into equity shares.
• Bonus issue or rights issue: Before issuing bonus or rights shares, authorised capital must accommodate the new shares.
• Merger or acquisition: During M&A transactions, the acquirer or merged entity may need to increase authorised capital for share swaps.

Step-by-Step Process to Increase Authorised Capital in Tamil Nadu

The process involves both MCA filings and state-level stamp duty compliance. Here is a complete walkthrough:

Step 1: Check the Articles of Association (AOA)

Verify that your company's AOA contains a provision authorising the increase of share capital. If not, you must first amend the AOA. Most standard AOAs drafted under the Companies Act, 2013 include this provision.

Step 2: Hold a Board Meeting

Convene a Board of Directors meeting to pass a board resolution approving the proposal to increase authorised share capital and to fix a date for the Extraordinary General Meeting (EGM) or pass a resolution by circulation (for private limited companies, if permitted).

Step 3: Pass an Ordinary Resolution at EGM/AGM

Under Section 61 of the Companies Act, 2013, the increase in authorised share capital requires an ordinary resolution (simple majority) of shareholders. Issue proper notice (at least 21 days in advance for a public company; shorter notice with consent for private limited companies).

Step 4: Amend the Memorandum of Association (MOA)

After the resolution is passed, the capital clause (Clause V) of the MOA must be updated to reflect the new authorised share capital.

Step 5: Pay Stamp Duty in Tamil Nadu

Before or at the time of filing with the ROC, obtain e-Stamp paper of the required value from authorised vendors in Tamil Nadu or through the state's e-stamping portal. The stamp duty is calculated at 0.15% on the increased amount.

Step 6: File Form SH-7 with MCA

Within 30 days of passing the ordinary resolution, file Form SH-7 on the MCA21 portal. Attach the following documents:

• Certified copy of the ordinary resolution
• Altered MOA (updated capital clause)
• Notice of EGM/AGM along with explanatory statement
• Copy of the stamped AOA amendment (if applicable)
• Proof of stamp duty payment (e-Stamp paper)

Step 7: ROC Approval and Updated Records

Upon successful processing, the MCA updates the master data of the company to reflect the new authorised share capital. You can verify the updated capital on the MCA portal under the company's master data.

Important: Filing Form SH-7 beyond 30 days attracts additional filing fees and late penalties under the Companies Act, 2013. Always file within the prescribed timeline.

Stamp Duty Comparison: Tamil Nadu vs Other States

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

State	Stamp Duty Rate	Cap / Minimum
Tamil Nadu	0.15%	No upper cap
Maharashtra	0.2% (on increased amount)	No upper cap
Karnataka	0.15%	No upper cap
Delhi	0.1% (on increased amount)	Capped at ₹25 lakhs
Rajasthan	0.15%	No upper cap
Gujarat	0.1% (on total authorised capital, not just increase)	Varies

For a comprehensive comparison across all states, refer to stamp duty rates on authorised capital increase across all states in India.

Documents Required for the Process

Keep the following documents ready before initiating the increase in authorised share capital:

• Certificate of Incorporation of the company
• Current MOA and AOA
• Latest list of directors and shareholders
• Board resolution approving capital increase
• Ordinary resolution passed at EGM/AGM
• Notice of meeting and explanatory statement
• DSC (Digital Signature Certificate) of the authorised director
• Proof of stamp duty payment (e-Stamp paper from Tamil Nadu)

Common Mistakes to Avoid

• Calculating stamp duty on total capital instead of incremental amount: The stamp duty in Tamil Nadu is on the increase in authorised capital, not on the total authorised capital after increase.
• Missing the 30-day deadline for SH-7 filing: Late filing results in additional fees and MCA penalties, which can be substantial.
• Not updating MOA before filing: The altered MOA must accompany Form SH-7. Filing without it leads to rejection.
• Using wrong e-stamp value: Always calculate the stamp duty precisely and ensure the e-stamp paper is of the exact or higher denomination required.
• Ignoring AOA compatibility: If the AOA restricts capital increase beyond a certain limit, it must be amended first via a separate special resolution and Form MGT-14.

MCA Fees for Form SH-7

Apart from stamp duty, the MCA levies its own filing fees for Form SH-7, which are based on the company's authorised share capital after the proposed increase:

Nominal Share Capital (After Increase)	MCA Filing 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	₹2,000
Above ₹1,00,00,000	₹5,000 (subject to MCA schedule updates)

Note: MCA fees are updated periodically. Always verify the current fee schedule on the Ministry of Corporate Affairs portal before filing.

How Taxocity Helps

Taxocity, with over three decades of expertise in corporate compliance and taxation, provides complete end-to-end support for increasing authorised share capital in Tamil Nadu and across India. Here is what you get:

• Accurate stamp duty calculation based on the applicable rate for your state and increment amount
• Drafting of board resolutions and EGM notices compliant with the Companies Act, 2013
• MOA amendment drafting with the updated capital clause
• e-Stamp procurement and payment in Tamil Nadu on your behalf
• Form SH-7 filing on MCA21 portal within the stipulated 30-day window
• Real human experts assigned to your case - no chatbots, no delays
• Rated 4.8/5 from 5,000+ client reviews, with a 100% compliance guarantee

Whether you are a startup preparing for a funding round or an established company planning an expansion, Taxocity ensures your capital increase is done right the first time.

Also explore: Private Limited Company Registration | LLP Registration | Stamp Duty in Karnataka | Stamp Duty in Maharashtra

Frequently Asked Questions

Is stamp duty mandatory before filing Form SH-7 in Tamil Nadu?

Yes. Stamp duty must be paid (via e-Stamp paper) before or at the time of executing the MOA amendment document and before filing Form SH-7 with the ROC. Filing without proper stamp duty payment can render the instrument legally inadmissible.

Who is liable to pay the stamp duty?

The company undergoing the increase in authorised share capital is responsible for paying the applicable stamp duty to the Tamil Nadu state government.

Can the stamp duty be paid online in Tamil Nadu?

Yes. Tamil Nadu has an e-Stamping system through which companies can procure e-Stamp paper online or through authorised bank branches and sub-registrar offices across the state.

What happens if stamp duty is underpaid?

If stamp duty is underpaid, the instrument may be treated as insufficiently stamped. Under the Stamps Act, the company may be required to pay the deficit along with a penalty, which can range up to 10 times the deficit amount depending on the authority's discretion.

Is Form MGT-14 also required for increasing authorised capital?

Generally, an ordinary resolution for increasing authorised share capital does not require Form MGT-14 filing, as only special resolutions and certain board resolutions are mandatorily filed via MGT-14. However, if the AOA amendment involves a special resolution (e.g., altering the AOA to allow the increase), then MGT-14 must also be filed.

How long does the entire process take?

With all documents in order, the MCA typically processes Form SH-7 within 3 to 7 working days. The overall process, including board meeting, EGM, stamp duty payment, and filing, usually takes 15 to 30 days.

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Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or financial advice. Stamp duty rates and MCA fee structures are subject to change by the respective state government and the Ministry of Corporate Affairs. Please consult a qualified tax advisor or corporate compliance professional before taking any action. Taxocity's expert team is available to guide you through the process accurately and efficiently.