Govt extends implementation of uniform stamp duty for capital market instruments to July 1

The government has put off implementation of the uniform stamp duty on transfer of shares, debentures, futures, options, currency and other capital market instruments to July 1, 2020.

The finance ministry also clarified that there is no change in the financial year.

“There is no extension of the Financial Year,” said a finance ministry statement, clarifying that the notification issued by the department of revenue pertained to amendments in the Indian Stamp Act.

“It pertains to putting in place an efficient mechanism for collection of stamp duty on security market instruments transactions through stock exchanges or clearing corporation authorized by stock exchanges depositories,” it said adding that this change was earlier notified to be implemented from 1st April, 2020.

However, due to the prevailing situation, it has been decided that the date of implementation will now be postponed to July 1, 2020, the statement added.

The notification had led to wide speculation on social media that the financial year was being extended by three months.

The government had introduced changes to the Stamp Duty Act last year by introducing a uniform rate of stamp duty on trading of shares and commodities which was being charged at different rates by different states.

Execution of the changes was earlier set for January 9, 2020 but was then extended to April 1.

With the amendment issued Monday, from July 1, stock exchanges will collect stamp duty on trading stocks and commodities on exchanges, while depositories will collect on off-market transactions, and deposit the proceeds with the central government, which will then be divided among states. While the earlier rules gave advantage to some states as they offered lower rates for companies to get incorporated, the new rules will bring in parity among all states.

From July 1, rate of stamp duty will change for debentures, transfer of de-mat securities, futures, options, currency and interest rate derivatives, government securities and repo on corporate bonds. Off-market transactions, including transfer of shares at the time of inheritance, gifts and transactions in unlisted securities among others, will also be charged a fee.

For intra-day equity and options (equity and commodities) trades, the new stamp duty would be 0.003% or Rs 300 per crore, while for futures — equity and commodities — it will be 0.002% or Rs 200 per crore and for currency, it will be 0.0001% or Rs 10 per crore.

Source Article

Lois C. Ferrara

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