Association of National Exchanges Members of India to approach new government for STT removal, reducing stamp duty

NEW DELHI: Concerned over high transaction costs in the capital market, grouping of trading members ANMI is likely to approach the new government seeking removal of Securities Transaction Tax and reduction in stamp duty.

The Association of National Exchanges Members of India has been seeking removal of STT for a long time as part of efforts to make the capital market more attractive. It expects that the new government would have a re-look at the whole issue with fresh perspective and an open mind.

ANMI President Naresh M Tejwani said: "It is a matter of great concern that Indian stock market indexes and individual stocks are being traded on international markets due to high cost of transaction on domestic exchanges.

"The open interest of Nifty on Singapore Stock Exchange is almost double than that on our National Stock Exchange." According to him, ANMI definitely looks toward removal of STT and uniform stamp duty at reduced rates. "A detailed submission from ANMI is likely to be made to the government as soon as it is formed," Tejwani added.

Observing that there was an urgent need to raise long term funds in our capital market, ANMI said that investment by pension funds and retirement funds in the nation's equity markets should be encouraged.

ANMI also said that the debt market should be developed by selling of government securities through the exchanges as well as measures for rejuvenating retail participation in the capital markets.

"A special scheme with an investment limit of Rs 2 lakh should be launched which should be open to all investors," Tejwani said. "The investment under this scheme should be deductible from the gross total income of the investor. No tax should be levied on incomes generated from this scheme provided it stays invested for a period of 3 years," he added.

Exuding confidence in the new government Tejwani said: "ANMI is certain that the incoming government will take speedy and consistent decisions enabling savings to get converted into productive investments for the economic development of our country".