Tamil Nadu government seeks help from stock exchanges for stamp duty collection

MUMBAI : Non-receipt of stamp duty on stock market transactions has prompted the registration department of the Tamil Nadu government to approach the country’s two premier stock exchanges with a request to collect the duty from its members.

In a written communication to NSE and BSE, the registration department said the Tamil Nadu government is not receiving any stamp duty on all the transactions of members done on behalf of the clients residing in Tamil Nadu and which are routed through the two stock exchanges.

The members should pay the duty every month at the time of monthly settlement of their accounts with the stock exchanges, said the registration department. Under the Indian Stamp Act, stamp duty will be applicable on agreements or memorandum of agreements of the members of stock exchanges for their transactions with the clients or with other members.

It will be levied on both spot delivery of shares and transactions in futures and options at the rate of Re 0.15, or 15 Paise, for every Rs 2,500 worth of securities bought or sold. Some of the country’s leading stock brokers have branches or franchisees in Tamil Nadu.

The Tamil Nadu government’s communication to the stock exchanges reflects its concerns over non-receipt of duty on stock market transactions done on behalf of the local clients.