MUMBAI: India’s capital market representatives on Tuesday urged Finance Minister Nirmala Sitharaman to keep the securities transaction tax (STT) on cash equities lower than that on equity derivative trades in the upcoming Budget. They also suggested to the ministry that in case of buyback of shares, tax should be levied only on profits and not on the total buyback value, sources said. Currently, the STT in the equity cash market ranges from 0.025% to 0.1% while the rates in the derivatives market range between 0.125% and 0.1%. Lower rates in the cash segment may lead to higher participation in this segment as compared to the derivatives segment. Recently, the government, policy makers and regulators have been considering ways to rein in the trading and betting habits of retail investors using equity derivative products, especially options.On Tuesday, the group of people also suggested to the Finance Minister that the short-term dividend tax rate paid by domestic investors should be in line with the rate paid by NRIs. news network
