Jan 8, 2020

Uniform stamp duty for all deals via exchanges notified. Here are the key things to know

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Addressing the issue of varied rates across states, the Centre on Tuesday notified that stamp duty for trading in stocks, derivatives, currencies and commodities will be uniformly charged, effective from January 9.

The notification also makes it easier for consolidated payments through the exchanges where the products are traded.

At present, brokers have to comply with stamp duty payments under the rates levied by states.

The new rate will benefit the currency traders most as it will come down from Rs 200 to just Rs 10 per Rs 1 crore of trade.

According to Corporate law site ‘Corporate Professionals’, with the amendments to the Stamp Act, the central government aims to bring sale or transfer of securities through electronic mode within the ambit of stamp duty and create additional revenue to the state governments and also lay at rest certain ambiguities in the law.

The single rate and centralised system will help streamline the entire process, reduce the cost of collection and plug revenue leakage.

But it will lead to increase in cost of trading in securities as transactions specifically on stock exchanges are subject to the securities transaction tax.

“It’s also important to bring the state governments on board with respect to stamp duty rates on issuance of securities, the subject that falls under List II of the Constitution and on which the state governments are only empowered to legislate,” it said.

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