Ahead of the Union Budget 2023-24, stock brokers' association Anmi has urged the government to accord industry status to Sebi-registered intermediaries and complete abolition of the Securities Transaction Tax (STT) and Commodities Transaction Tax (CTT).
In addition, Anmi (Association of National Exchanges Members of India) has sought the exemption of short-term capital gains of up to Rs 1 lakh and raising the threshold for tax on dividends.
Industry status for Sebi-registered market intermediaries
Presenting a recommendation for the upcoming Budget to Central Board of Direct Taxes (CBDT) chairman Nitin Gupta, Anmi, a grouping of 900 stock brokers, has sought industry status for Sebi-registered market intermediaries.
The move will remove unwarranted restrictions, cost of funding and capital requirements for market intermediaries and will help create financial services companies of global scale.
The grouping has suggested dispensing with the treatment of speculative income/loss under section 45 of day trading in listed shares in which no delivery is taken or given and to treat income arising from the purchase and sale of shares without delivery as business income.
This will give a fillip to investors and share brokers to engage wholeheartedly in share transactions.
Complete abolition of Securities and Commodities Transaction Tax
Anmi believes there is a strong case for the complete abolition of Securities Transaction Tax (STT) and Commodities Transaction Tax (CTT).
It has reaffirmed that India is the only country that levies STT and CTT charges in the derivatives and commodities segment.
The stock brokers' body has asked for the reintroduction of rebate under erstwhile Section 88E for STT and CTT paid. The reintroduction of Section 88E will result in increased volumes and could lead to a much larger collection of STT or CTT.
Short-term capital gain
In its submission, the association has recommended that short-term capital gain (STCG) should be allowed a tax exemption of up to Rs 1 lakh, which will improve participation in the market and encourage investment.
At present, short-term capital gains arising on equity shares (listed) are taxed at 15 per cent plus surcharge.
Adjust loss against income
Anmi has asked that carried forward business loss be allowed to be adjusted against any head of income, except salary, for up to eight years. This will result in the rationalisation of income, which is subject to payment or tax.
TDS
Currently, TDS on the dividend is not required to be deducted if the dividend does not exceed Rs 5,000. However, this is limited to individual recipient shareholders only.
Anmi wants it to be applied to all residents irrespective of status and the threshold for exemption limit to be raised to Rs 10,000 from payment of TDS.
"For enhanced GDP growth, the government needs to incentivise and encourage equity investment. In this regard, we have submitted our recommendations which covered challenges that should be addressed in the upcoming Union Budget," Kamlesh Shah, President, Anmi, said.
Implementing these reforms would have a significant impact on the growth and development of the markets, he added.
