Interim Budget: Stamp duty on shares to be based on investor's home state

 
The Association of National Exchanges Members of India (Anmi) and the Bombay Stock Exchange Brokers Forum had submitted a memorandum to the Securities and Exchange Board of India (Sebi) chairman on these and other matters; requesting tax rationalisation to attract more investors.
 
“In India, the percentage of total population investing in stock exchange-traded instruments is abysmally low. Hence, there is a need to attract and incentivise investors for holding the investment for a longer term, so as to attract conventional investors who invest in gold, fixed return instruments or real estate,” the letter, reported earlier, stated. 
 
It had also asked for withdrawal of dividend distribution tax, and exemptions on long term capital gains tax for securities held more than 3 years, among others.
 
“With 100 per cent demat, why should stamp duty be applicable in the first place? Currently, there is practically no difference between Stamp Duty and STT. Two levies will simply increase cost of transaction for investors and create scope for future friction,” said Uttam Bagri, chairman of the Bombay Stock Exchange Brokers Forum.
 
“Rather than abolishing stamp duty as STT is already levied on all transactions, the (government) has de-facto imposed a state STT in the guise of stamp duty,” said Rajesh Baheti, President of Anmi.
 
 
Bone of contention

• Stamp duty on shares streamlined
• Stock exchange to be point of collection
• Buying investor's domicile will determine state's share
• Broker bodies disappointed, had sought abolition
• Say this is effectively second, state-level STT