The Hindu Business Line : FISE seeks one-year look-back on tax credit

In order to sustain the fee-based income of regional stock exchanges, FISE has sought re-introduction of mandatory listing on the regional stock exchanges.

Bangalore , June 15

THE Federation of Indian Stock Exchanges (FISE) has sought a one-year look-back to claim tax credit at the time of filing tax returns by investors and other capital market participants.

According to FISE's pre-budget memorandum, profits on trading made in a financial year should be allowed to be set off against the losses in the immediate succeeding fiscal and appropriate tax credits should be allowed. "This is in the interest of the large section of small traders in the market," the FISE Chairman, Mr Ramu Sharma, said.

FISE also called for abolition of long-term capital gains tax on sale of shares and securities, if re-invested in capital market instruments within 12 months of sale. Such concession, if allowed, is likely to result in increased investments in the primary and secondary markets, Mr Sharma said.

In order to sustain the fee-based income of regional stock exchanges, FISE has sought re-introduction of mandatory listing on the regional stock exchanges. Trading in these securities should be permitted through the common order book, expected to be implemented through Indonext, FISE said.

Incomes of regional stock exchanges have shrunk considerably following companies voluntarily de-listing from these exchanges as thin trading did not offer enough incentive of cough up listing fee to the regional exchange.

FISE has recommended that regional stock exchanges through their subsidiaries should be mandatorily designated as syndicate members for all primary market offerings. Such a move is likely to bring in larger participation across the country through broad base investor interface.

Moreover, FISE, among several recommendations has sought that demutualisation and corporatisation of stock exchanges be carried in line with M.H. Kania committee recommendations.