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NSE Demands Disclosure of Excess STT Collections
10 Mar
Summary
- Brokers must disclose and remit excess STT collected.
- Action follows Income Tax Department's flagging of discrepancies.
- Members have seven days to comply with NSE directive.
The National Stock Exchange (NSE) has issued a directive to its members, encompassing brokers and sub-brokers, concerning the disclosure and remittance of any excess Securities Transaction Tax (STT) that was collected but not deposited with the government for the financial year 2023-24 and earlier periods.
This instruction was prompted by the Income Tax Department, which identified that some market intermediaries had retained STT collected from investors. The Joint Commissioner of Income Tax communicated this issue to the NSE, leading to the exchange's demand for details on excess STT held by members.
Brokers are now required to submit these details directly to the NSE and remit the collected excess STT. They must also include interest, calculated at 1% per month for any delay. The NSE will then deposit these funds into the government's account. Members have a strict compliance period of seven days from the circular's publication.
This communication builds upon a previous directive from March 19, 2025, which addressed similar issues for FY23 and prior years. STT is a crucial tax on equity and derivatives trading in India, levied on transactions executed on recognised stock exchanges and collected by brokers at the time of trade.
