The Income Tax (I-T) Department has asked stock brokers to remit excess securities transaction tax (STT) collected from clients for the financial year 2023–24 and earlier years, along with interest, if the amount has not been deposited with the government, according to a circular issued by the National Stock Exchange (NSE).
In a letter dated March 5 to the NSE, the I-T Department said certain brokers and sub-brokers had collected STT in excess from clients but had not remitted the amount to the government account for FY24 and preceding years.
Following the communication, the NSE on Tuesday asked brokers to furnish details of the excess STT retained by them at the earliest.
According to the circular, brokers must deposit the excess STT with the NSE within seven days, along with interest at 1 per cent per month for the period of delay. The exchange will subsequently remit the amount to the government account.
STT is a direct tax levied on the purchase or sale of securities and derivatives traded on recognised stock exchanges, irrespective of whether the transaction results in a profit or loss. The tax is collected by brokers on behalf of the government and forms a key component of the Centre’s tax revenues.
In FY24, actual STT collections stood at Rs 52,197 crore. The government has estimated STT collections at Rs 73,700 crore for FY27. In comparison, the estimate for FY26 was Rs 78,000 crore, while the revised estimate has been pegged lower at Rs 63,670 crore.
Earlier this year, the Finance Minister announced an increase in STT on futures and options (F&O) transactions, effective April 1. This marks the second revision in recent years, following the changes announced in the Union Budget 2024.
From April 1, STT on futures will rise from 0.02 per cent to 0.05 per cent of the traded value. The tax on option premium will increase from 0.1 per cent to 0.15 per cent, while the levy on exercising options will go up from 0.125 per cent to 0.15 per cent of the intrinsic value.
