Unique tax payers trading on NSE more than tripled since pandemic

Numbers are 40 per cent lower than the number of overall investor accounts

The number of unique tax identities that registered for trading on the National Stock Exchange has more than tripled since the pandemic.

It rose from 27 million in the financial year 2018-19 (FY19) to 92 million in FY24, according to data shared in the Economic Survey on Monday.  The number of total investor accounts for holding dematerialised securities, or demat accounts, was closer to 150 million, according to data from the Securities and Exchange Board of India (Sebi) bulletin for the month of March 2024. The National Stock Exchange is the largest stock exchange in terms of the value of shares and derivatives changing hands. A lower number of unique tax identities relative to total investor accounts, could point to duplication-where one investor holds more than one investor account.

 

 “The enhanced participation of retail investors in the Indian capital market is hugely welcome and lends stability to the capital market. It has also enabled retail investors to earn higher returns on their savings. Most of the new retail investors are likely young and may have a higher risk appetite,” said the economic survey.

The survey highlighted the increased participation in the derivatives segment which it noted had largely lost money for investors globally.

“A significant stock correction could see losses that are more considerable for retail investors participating in capital markets through derivatives. Investors’ behavioural response would be to feel ‘cheated’ by unseen more considerable forces. They may not return to capital markets for a long time. That is a loss to them and the economy,” it added.

Income tax data also shows an increase in the value of capital gains declared. It rose from Rs 0.9 trillion in assessment year 2018-19 to Rs 3 trillion in assessment year 2023-24.

The assessment year broadly corresponds to data earned in the previous year. So numbers may have risen since then. The BSE Sensex touched an all-time high of over 80,000 in July.