The Hindu Business Line : Brokers propose income-based transaction tax

The Finance Minister, Mr P. Chidambaram; the Finance Secretary, Mr D.C. Gupta; the Chief Economic Advisor, Mr Ashok Lahiri; the SEBI Chairman, Mr G.N. Bajpai, and stock brokers at a meeting in the Capital on Tuesday. — Kamal Narang

New Delhi/Kolkata , July 13

REPRESENTATIVES of the broking community on Tuesday shared their cup of woes on the proposed 0.15 per cent securities transaction tax with the Finance Minister, Mr P. Chidambaram, and suggested that the burden of taxation on the different players in the capital market should be commensurate with their incomes.

"We told the Finance Minister that the tax burden on different players in the market like day traders, arbitrageurs etc should be commensurate to their incomes. The Finance Minister gave a patient hearing and we are hopeful of a positive and favourable outcome," Mr S.K. Rustagi, President, Association of NSE Members of India (ANMI) told Business Line here.

Besides making recommendations on the rates, applicability of tax on different market players, the broking community also expressed keenness that the effect of taxation between the buyer and the seller should be equitable.

One of the reasons as to why the proposed securities transaction tax has caused anguish among the market players is that it would leave certain market players like day traders, arbitrageurs and jobbers out of business.

Informed sources said that the Finance Minister had told those present at the meeting that he would prefer to consult the bankers before taking a final view on the matter of levy of securities transaction tax on the bonds that are traded in the recognised stock exchanges.

The majority of those present at today's meeting were from the equity broking community. Interestingly, most of them said they had not sought the levy of securities transaction tax from the Government.

Without going into the details of the nearly two hour long meeting at the North Block on Tuesday evening, the Securities and Exchange Board of India (SEBI) Chairman, Mr G.N. Bajpai, told presspersons that the Finance Minister would have to take a view on the matter after considering the suggestions of the different market players.

"As a regulator, I can only pass on the taxation concerns of the market players to the Finance Minister. He has to take the decision," Mr Bajpai said.

SEBI Chief also met the Finance Minister on Tuesday morning on the same issue.

The former President of the Stock Exchange, Mumbai, Ms Deena Mehta, told reporters that the concerns of the broking community over the proposed securities transaction tax were conveyed to the Finance Minister. "We told the Minister that there are different players in the capital market and the level of taxation on each player should be in line with their incomes. The tax should not become a burden and threaten their survival. We are hopeful of a favourable review of the proposed system," she said.

She also said that the broking community would definitely help in compliance of the law that is finally legislated.

More Stories on : Stock Markets | Taxation | Budget

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Low-pressure holds key to monsoon revival

Car sales up 25 pc in June

Bond prices jump 30-40 paise; volumes shoot up

Punjab issue: PM calls CMs for meet on water dispute

Infosys beats forecasts with 39.23 pc rise in Q1 net

Brokers propose income-based transaction tax

Response to day traders' strike call lukewarm

Decision on EPF interest rate deferred again