INSUBCONTINENT EXCLUSIVE:
MUMBAI: Stock brokers have sought exemption of long-term capital gains tax (LTCG) on securities held
for three years or more,
withdrawal of dividend distribution tax (DDT), abolition of stamp duty on stock exchange transactions and a higher limit for investment
under Section 54EC of the Income Tax Act.
The Association of National Exchanges Members of India and the Bombay Stock Exchange Brokers Forum
listed these demands in a joint letter addressed to markets regulator Securities and Exchange Board of India, to be included in the
on exercise of options with introduction of delivery-based derivatives contracts
At present, the STT on deliverybased settlement of futures contract is at the same rate applicable on delivery-based purchase or sale of
Brokers want removal of this additional tax.
Their main demand is for scrapping of LTCG on securities held for three years or more
The government in the last budget introduced an LTCG of 10% on all stocks sold after holding for a year
In India, the percentage of the total population investing in stock exchange-traded instruments is abysmally low and hence, there is a need
to attract and incentivise investors for holding the investment for the long term, the brokers forum said.
On dividend distribution tax
(DDT), the industry bodies said the levy, at 20% currently, resulted in triple taxation of corporate earnings
The tax on the dividend should be in the form of equalisation to balance the difference between corporate and personal tax, they said, and
recommended the withdrawal of DTT and instead levy of a 10% tax on the recipient.
Other demands include reintroduction of the rebate under
the erstwhile Section 88E for STT and CTT (commodities transaction tax) paid, reduction in the rate of STT, exemption of interest from levy
of GST and abolition of stamp duty on stock exchange transactions.
In order to encourage savings, channelise it towards productive assets
and give a fillip to the divestment targets of the government, they recommended that an additional ?50 lakh limit be given under Section
54EC for investment in the ETFs comprising shares in central public-sector enterprises.
Since the Centre imposes STT, which is transaction
based, the levy of stamp duty by states is not justified, they said.
