Effects of new rules: Domestic brokerages try to dodge derivatives curbs

Several domestic brokerages are asking their clients to shore up their incomes in the wake of the implementation of ‘product suitability’ framework in the derivatives market. Under the proposed framework, the exposure of an investor in the derivatives market will be directly linked to the income disclosed in his/her tax returns. 

Increased disclosure of agricultural income will boost the overall income of an investor without leading to an increased tax burden, as income earned from agricultural activities is tax-free in India.

This development comes at a time when a large number of small and mid-sized brokerages are expressing concerns about