The National Stock Exchange (NSE) has directed brokers to pay the excess non-remitted securities transaction tax (STT) they had collected from customers, along with an interest, to the government’s account. For the excess tax which was retained with brokers in FY24 and prior years, an interest of 1% for every month’s delay should be paid to the government, as per an NSE circular dated Tuesday.
Brokers should remit the recovered amount to the NSE, which will be then paid to the government’s account. Brokers and sub-brokers are directed to comply with the circular within 7 days of the issuance of the circular.
According to sources, some brokers charge excess STT to their clients that might have come to the notice of the income tax department. Hence, the government has asked brokerages to deposit the same to the exchanges.
When is STT charged?
Irrespective of profit or loss, an STT is charged while buying or selling securities and derivatives which are traded on recognized stock exchanges. Brokers collect this tax on behalf of the government.
With an aim to curb speculative trading, Finance Minister Nirmala Sitharaman had last month announced raising STT on equity derivatives effective April, which disappointed investors and dragged down the market. Following this, the brokers association had sought a revision and rollback in this tax.
The STT on equity futures will rise to 0.05% from 0.02%, that on options premium will be increased to 0.15% from 0.1%, and that on exercising options will be 0.15% from the current 0.125%.
In FY25, the government’s revenue from STT jumped 55% on year to more than ₹52,000 crore. For FY26, the government estimates this figure to rise to ₹63,670 crore, which is lower than the earlier projection of ₹78,000 crore.
