I-T Dept says no to Sebi plea for tax exemption for unified broking licence

Indian tax authorities are not willing to concede the request of market regulator Securities and Exchange Board of India (Sebi) to provide one-time tax exemption to trading members of stock and commodity exchanges to do both businesses under one entity.

According to a tax official, such consideration could peg loss to the exchequer in a scenario when India is already grappling with revenue shortfall due to steps taken by the government such as the implementation of goods and services tax and demonetisation. Currently, the government is evaluating exemption on long-term capital gains tax which has now been withdrawn to minimise economic distortions and curb erosion of tax base.

Tax implications is a major hurdle for brokers to opt for unified licence regime. The change was notified in July 2017, by amending the Securities Contracts (Regulation) Rules and Sebi (Stock brokers and Sub-Brokers) (Amendment) Regulations. Since then not a single broking firms have executed the concept.