NEW DELHI: The government is expecting to mop-up above Rs 20,000 crore as Securities Transaction Tax on account of booming equity market going by the current revenue trend. “We are getting good response in terms of STT is concerned.
Despite lockdown so far the STT collection for April to June period is Rs 5,373 crore. This is more than one-third of what we had collected last financial year. Even by a conservative estimate, we expect that the collection will cross Rs 20,000-crore mark,” a senior official in the revenue department told TNIE.
STT receipts grew 37% in FY21 to Rs 16,927 crore against Rs 12,374 crore received from the financial year 2019-20. Meanwhile in FY 21, corporate tax receipts contracted 18% and personal income tax by 2%, on account of the pandemic.
Securities and transaction tax is levied on sale and purchase of shares, mutual funds, bonds and debentures. For example, on a delivery based transaction of listed equity shares, both the purchaser and seller has to pay 0.1% as securities transaction tax.
The official added that with economy back on the recovery mode and many good IPOs lined up along with festive season will keep the collection going up. “There are many big IPOs lined up. Even LIC will be listed by the last quarter which will be a mega issue. So the market will remain bullish,” the official added.
The poor return in conventional instruments like fixed deposits is forcing people to invest in market which remain bullish even during the pandemic. The cumulative number of total demat accounts increased from 41 million at the beginning of FY 21 to 55 million by the end of FY21 — an increase of 34.7 %, according to SEBI chairman Ajay Tyagi.