NSE tells brokers to disclose and remit excess STT retained for FY24 and earlier years

Leading exchange NSE has directed its members, including brokers and sub-brokers, to disclose and remit any excess Securities Transaction Tax (STT) collected but not deposited with the government for the financial year 2023-24 and earlier periods.

In a circular issued on March 10, the exchange said the move follows directions from the Income Tax Department, which flagged instances where excess STT collected by some market intermediaries had not been remitted to the government account.

STT is a tax levied on transactions executed on recognised stock exchanges and is collected by brokers at the time of trading before being deposited with the government.

According to the circular, the Joint Commissioner of Income Tax, Range 7(1), wrote to the exchange on March 5, advising it to draw attention to the issue and seek details from members who may have retained excess STT.

Following the instruction, NSE has asked all members to furnish details of such excess STT collected and retained with them for FY24 and preceding years. These details must be submitted directly to the exchange.

The exchange has also instructed brokers to remit any excess STT collected along with interest calculated at 1% for every month of delay. The funds must be paid to NSE immediately, after which the exchange will deposit the amount into the government account.Members have been asked to comply with the directive within seven days from the publication of the circular.Also read | Everyone selling IT stocks after record crash, but this Rs 1.3 lakh crore mutual fund doing the exact opposite

The communication is a continuation of an earlier circular issued on March 19, 2025, which dealt with excess STT retained by members for FY23 and earlier years.

STT forms an important part of the tax framework governing equity and derivatives trading in India. The levy is applied across a range of market transactions including equity delivery trades, intra-day equity trades and derivatives contracts.

While brokers are responsible for collecting the tax from investors at the time of trade execution, they are required to deposit the amount with the government through the exchange system. Any delay or discrepancy in remittance can attract penalties or interest liabilities under tax rules.

NSE said members seeking clarification on the circular can contact its taxation department.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)