Skip to main content

Finmin Seeks Expert Views on Impact of STT Removal

By
Govt plans to stretch period for applicability of long-term capital gains tax to three years 
The Finance Ministry has sought suggestions from leading tax experts and market participants on the implications of scrapping security transaction tax (STT)--a levy on transactions done on stock exchanges. Tax consultants said the government wants to understand the impact of doing away with STT as it mulls stretching the pe riod for applicability of longterm capital gains tax from one year to three years.
STT is collected by the broker in addition to the brokerage soon after a trade is completed. A section of the market--shortterm traders and arbitrageurs--have been asking for a removal of STT because it squeezed their margins. The government in the budget of 2013-14 cut STT on equities and mutual fund units. In the last few days, top tax experts have been sounded out by the Finance Ministry on the matter. “There have been various representations to the government on various aspects of capital gains taxation, as well as slashing of STT,“ said Ketan Dalal, managing partner, west, PwC India.
STT was introduced during P Chidambaram's tenure as the finance minister in the Union Budget of 2004-05 to boost revenues from stock trades.
The government felt investors were avoiding paying taxes on gains made from stocks.
Now, as the finance ministry debates on extending the tenure for applicability of longterm capital gains, market participants are speculating that STT could be scrapped as a co unterbalance for the market.
Many tax experts and brokers believe that the government is unlikely to rock the boat as the market goes through testing times. “Given the pressure to augment revenue collection, the demand for removal of STT would depend on estimate of STT revenue loss and higher capital gains tax collection if long term is redefined to be three years,“ said Vipul Jhaveri, Managing Partner, Tax and Regulatory, Deloitte Haskins & Sells.
“However, I would think that the government may also take in to consideration the situation of the capital markets, where falling markets can adversely impact the likelihood of any capital gains arising for taxation purposes“. In the financial year ended March 31, 2015, the government collected . 6,280 crore through security ` transaction tax. “In spite of revenue considerations, given the state of the capital market currently, it seems unlikely that any adverse changes will be made,“ said Dalal.
The Economic Times, New Delhi, 26th February 2016

Comments

Post a Comment

Popular posts from this blog

Data storage norm splits digital payments industry

By
Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...
18 comments
Read more

Offer’s for all of you

By
Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533  drop a mail to sales@webecreator.com
Post a Comment
Read more

Sebi to finalise options in commodities today

By
The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...
17 comments
Read more