The Bombay High Court has said that it has asked the Central Board of Direct Taxes (CBDT) to clear the ambiguity over the securities transactions tax (STT) rate on physical delivery of shares in the equity derivatives segment. As per reports, a division bench of Justices B R Gavai and M S Karnik was hearing a petition filed by the Association of National Exchanges Members of India (ANMI) against a July 17 circular issued by the National Stock Exchange (NSE).
The circular directed the members in the equity derivatives segment to collect the STT on physical settlement of stock derivatives at the rate of 0.10 per cent with effect from July 26. It added that if the CBDT issued any clarification or amendment on taxation of physically settled F&O contracts, the exchange would recover such additional tax burden from the members. As per reports, ANMI, a brokers' association, claimed in the petition that this was leading to an ambiguous situation.