Among the notable changes are charges levied by the exchanges, a hike in Securities Transaction Tax (STT), and revamped rules governing share buybacks.
NSE, BSE revise transaction charges
Leading stock exchanges BSE and NSE revised their transaction fees for cash and futures and options trading. These changes, which will kick in from October 1, came after markets regulator Sebi mandated a uniform flat fee structure for all members of market infrastructure institutions.BSE has revised the transaction fees for Sensex and Bankex options contracts in the equity derivatives segment to Rs 3,250 per crore of premium turnover. However, the transaction charges for other contracts in the equity derivatives segment remain unchanged.For Sensex 50 options and stock options, BSE charges a transaction fee of Rs 500 per crore of premium turnover, with no transaction fee applicable for index and stock futures.
According to NSE, the transaction fee for the cash market will be Rs 2.97 per lakh of traded value. For equity futures, the fee will be Rs 1.73 per lakh of traded value, while for equity options, it will be Rs 35.03 per lakh of premium value.
In the currency derivatives segment, futures will incur a fee of Rs 0.35 per lakh of traded value, and options, including interest rate options, will have a fee of Rs 31.10 per lakh of premium value.
Hike in Securities Transaction Tax (STT)
Earlier during this year, Finance Minister Sitharaman announced an increase in the securities transaction tax (STT) on Futures & Options (F&O) trading. The changes are to be effective from October 1.
Under the new rules, trading in futures will attract an STT of 0.02% from 0.0125% earlier and options trading will be taxed at 0.1%.
The hike in STT was brought as a disincentive for investors following a massive surge in retail derivative trading. An increase in STT may impact the volumes and depth in the market and adversely affect the revenues of exchanges and Sebi, according to analysts.
New buyback taxation
Likening the income from share buybacks as dividend, Finance Minister Nirmala Sitharaman announced that the same will be taxed in the hands of shareholders from October 1. The taxation will be according to the applicable income tax slabs.
A share buyback is a process where a company repurchases its own shares from shareholders. This approach is often considered tax-efficient and offers a favorable method of returning cash to investors.
The new changes are intended to shift the tax burden from corporates to shareholders so that the companies can now use the funds for other purposes.
