ANMI has urged the finance ministry to reduce STT and abolish dividend tax

Taxation
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The Association of National Exchanges Members of India (ANMI) has urged the finance ministry to reduce STT and abolish dividend tax for the growth of the capital markets.

They have urged the finance ministry to give a rebate on STT, which has impacted volumes and revenue generation and escalated the cost of transaction for clients.

STT is the biggest cost component for a stock market participant, accounting for more than half the total cost of transaction for a stock market investor.

In no other global capital market, the taxes on transactions are so high when compared to total transaction cost of doing business in India. In 2016-17, the government collected Rs 8,358 crore from STT as against Rs 7,350 in 2015-16.

Abolition of dividend distribution tax (DDT) and amendment to Section 14A, Rule 8(d) of the Income Tax Rules are the two other demands for reforms by ANMI.

DDT is levied at almost 20 percent on the company for distribution of dividend to its shareholders.

The tax burden for brokerages has been increasing over the last three years - it has risen to 18 percent currently from 12 percent, ANMI said.

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STT Introduced by stupid PC, its time to reduce the tax rate or abolish STT , introduced by " Dynastic Regime "

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Question is Why will the government reduce STT & Dividend tax?

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Dividend is paid by companies on which income tax is paid, so it is kind of double taxation. It is levied on companies because it
is easier to track for tax department and there is no leakage. It may have made sense earlier, but now with everything linked to aadhar/demat/PAN, least finance minister can do is to tax the final recipient. It is ridiculous for a person in 10% or 5% or 0% income tax slab to pay 20% DDT.

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STT was introduced to contain stock traders by PC , at that time sock traders were not sympathetic to regime and also to " khush" Aam aadmi

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Seriously STT should be 20% of the current amount that it is. STT really is a pain for day traders who takes many trades during a day and is scalping out most of the position.

Current STT amounts are too much and quite stupid actually when comparing to other countries. And on top of that you have other taxes with the newly introduced GST. So why not merge this STT and GST together and charge a reasonable amount from traders. Why not ? Whats there to lose by doing this ?

On the other hand reducing these STT could very much increase the volume in the market increasing liquidity encouraging traders to place more trades and make a decent income.