NATIONAL STOCK EXCHANGE OF INDIA LIMITED

FINANCE & ACCOUNTS DEPARTMENT

CIRCULAR

 

To all Trading Members in F&O Segment

 

 

Circular No. : NSE/F&A/10706                                                                          Date: May 15, 2008

 

Dear Members,

 

 

Sub : Changes in relation to Securities Transaction Tax

 

 

Further to our earlier circular no.NSE/F&A/7527 dated May 26, 2006, we would like to inform you that as per the Finance Act 2008 (18 of 2008), which received the Presidential assent on May 10, 2008, the basis of levy of Securities Transaction Tax (STT) on sale of options and the value to be considered for “option in securities” with effect from 01st day of June, 2008 is revised as below.

 

Accordingly, STT on the transactions executed on the Exchange on or after June 01, 2008 shall be charged as indicated in Column D below.

 

Sr.No.

Taxable securities transaction

Effective rate till 31.05.2008

New rate from 01.06.2008

Payable by

A

B

C

D

E

1.

Sale of a derivative, where the transaction of such sale is entered into in a recognised stock exchange

0.017 per cent

Refer (a,b,c) below

Seller

a

Sale of an option in securities

0.017 per cent

Seller

b

Sale of an option in securities, where option is exercised

0.125 per cent

Purchaser

c

Sale of a futures in securities

0.017 per cent

Seller

 

 

Further the value of taxable securities transaction in relation to “option in securities” is aggregate of strike price and the option premium of such option in securities, as defined under section 99 (a) of Chapter VII of the Finance (No.2) Act, 2004, till May 31, 2008.

 

With effect from June 01, 2008, the said definition is amended as under:

 

(a)       Value of taxable securities transaction relating to an “option in securities” shall be the option premium, in case of sale of an option in securities.

 

(b)       Value of taxable securities transaction relating to an “option in securities” shall be the settlement price, in case of sale of an option in securities, where option is exercised.

 

This is for information and compliance of the Trading Members and also for onward transmission to the constituents.

 

 

In case of any clarifications you may contact the undersigned or Mr. Lalit Bohara or Mr. Yogesh Mohite at 2659 8140 or 2659 8100 Ext.3081/2/3.

 

 

 

For National Stock Exchange of India Limited

 

 

 

Amol Mahajan

Manager – Taxation