I-T department digs deeper into Jane Street case, surveys Nuvama

Mumbai: The income tax (I-T) department on Thursday conducted a survey on Nuvama Wealth Management Limited in connection with its preliminary assessments into US-headquartered proprietary trading firm Jane Street, probing whether the alleged market manipulation by the firm also led to potential tax losses.

Nuvama is Jane Street's on-ground trading partner in India. The move forms part of a broader investigation into suspected financial irregularities involving the US-based entity. The I-T department is examining possible violations of provisions under the General Anti-Avoidance Rules (GAAR) framework and permanent establishment (PE) norms, according to people familiar with the matter. Under GAAR, any arrangement lacking "commercial substance" or structured primarily to evade taxes may be disregarded by the tax department. PE refers to a company's taxable presence outside its home country.

In a filing to the stock exchanges, Nuvama said: "...the income tax department is conducting a survey today, under Section 133A of the Income Tax Act, 1961, at the Company's registered office. The Company is extending full co-operation with the authorities."


In its 105-page order dated 3 July, SEBI had alleged that Jane Street Group made illegal gains of ₹4,843.5 crore through alleged manipulation of trades in Bank Nifty and Nifty Index Options. SEBI directed Jane Street to impound and deposit the alleged gains in an interest-bearing escrow account with lien marked in its favour, while also imposing a temporary trading ban. On 21 July, SEBI lifted the ban and allowed Jane Street to resume trading in Indian markets under strict conditions, including a mandate that exchanges monitor its trades closely.

According to SEBI's findings, Jane Street's India entity executed intraday trades in the cash segment, while its offshore entities in Singapore and Hong Kong booked substantial profits through index option trades. SEBI had initially barred the group from capital markets, but lifted the ban after the firm deposited ₹4,840 crore (approximately $560 million) in alleged "unlawful gains" into an escrow account.