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Our Bureau

Mumbai , Sept. 23

THE Securities and Exchange Board of India (SEBI) has published the draft rules for the collection of the securities transaction tax (STT).

According to the draft rules, value of the taxable securities would be computed on the volume weighted average price of the transaction.

This volume weighted average price of the transaction would be computed in the following manner. The quantity of shares purchased or sold in each trade of the equity share executed by the person on that day, shall be multiplied by the price at which the trade is executed, to determine the trade value of each trade. Then, the aggregate trade value of all trades in the equity share by the person on that day shall be arrived at by totalling these trade values. The aggregate trade value will then be divided by the total quantity of the equity share traded by the person on that day, to determine the volume weighted average price of that equity share for that person for that day.

The same rule is applicable for transactions relating to units of equity-oriented mutual funds (MFs).

While the above rule is applicable for transactions in the netted settlement mode, for the auction settlement mode, where the share or unit is purchased or sold by a person in the trade-for-trade settlement mode, the value of the taxable securities transaction shall be the price at which the equity share or unit is purchased or sold, clarifies the draft document. Where the equity share or unit is sold in the auction settlement mode, the value of the taxable securities transaction shall be the price at which the equity share or unit is sold, says SEBI.

Trustees of MFs are mandated as the persons responsible for collecting and paying STT. Stock exchanges and MFs can pay the STT through any branch of RBI or State Bank of India or of any authorised bank accompanied by a securities transaction tax challan.

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