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The Budget has exempted income to core settlement guarantee fund set up by clearing corporations of stock exchanges from taxation.
Income to this fund arises from contribution received from member brokers, clearing members, investment made by the fund and from the penalties imposed by the clearing corporation. To guarantee the settlement of trades executed in respective segments of the exchange, it is mandatory for clearing corporations to establish a fund, called core Settlement Guarantee Fund (core SGF) for each segment of the exchange (equity cash, equity derivatives, currency derivatives, fixed income and the like).
Currently, income from contributions generated by investor protection funds of stock exchanges/ commodity exchanges/ depositories is tax exempt.
However, where any amount of the core SGF shared with either a clearing corporation or a stock exchange shall be deemed as the income of the previous year in which such amount is shared.
This amendment will become effective from April 1, 2016.
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