Parliament on Monday approved the Finance Bill 2023 with an amendment to the rate of securities transaction tax to be levied on options. Finance minister Nirmala Sitharaman had earlier in the day moved an amendment to the Finance Bill in Rajya Sabha to correct the rate of the securities transaction tax to be levied on options. The amendment proposed that STT at the rate of 0.0625% shall be levied on the sale of options as against the current rate of 0.05%.
The amended Finance Bill was approved by the Rajya Sabha by voice vote and recommended to the Lok Sabha, which had approved it on Friday. The Upper House of the Parliament also returned Jammu and Kashmir Budget 2023-24 and appropriation bills to Lok Sabha without any discussion. The passage of the Finance Bill by both houses marked the completion of the Budgetary exercise.
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The Bill was however cleared by both houses of the Parliament without any discussion, amidst continued disruption from the Opposition parties who have been demanding a probe by the joint parliamentary committee into allegations against the Adani Group. Both the Lok Sabha and Rajya Sabha are now scheduled to meet on Tuesday at 11 am.
The corrected rate hike for STT on options means a tax of Rs 6,250 on trade value of `1 crore instead of `5,000 earlier. This would be effective from April 1.
In the Finance Bill approved by Lok Sabha on March 24, the proposed change in the STT rate on options from 0.017% to 0.021 had led to a lot of confusion amongst market participants. Experts had pointed out that it had led to lack of clarity on the applicable STT rates on the sale of options as in May 2016, the rate was increased from 0.017% to 0.05%. The Finance Ministry had later said that it was a “typographical error,” which would be corrected.
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In all, the finance minister had moved 64 amendments to the Finance Bill on March 24 including a provision to do away with the long term capital gains benefit for debt mutual funds that invest up to 35% of their proceeds in equity shares of domestic firms, as well as setting up the goods and services tax appellate tribunal.
