The Ministry of Finance, contrary to earlier reports, has clarified there'll be no extension of the financial year 2019-20 till June. "There is no extension of the financial year," the finance ministry said. The ministry said the notification issued on March 30 pertained to date of applicability of stamp duty. "It pertains to putting in place an efficient mechanism for collection of stamp duty on security market instruments transactions through stock exchanges or clearing corporation authorised by Stock Exchanges Depositories," a CBIC statement said.
The statement said the change was earlier notified to be implemented from April 1, 2020, but due to the prevailing situation, it's now extended to July 1. The industry has been demanding extension of the fiscal year by three months given the economic impact caused by the outbreak of Covid1-19. A section of media had earlier reported that the new financial year will start from July 1.
To rationalise and harmonise the system of levying stamp duty and help curb tax evasion, the government had through the Finance Act, 2019, amended the Indian Stamp Act, 1899. Certain changes were to be effective from April 1, 2020. As part of the amendments, it was decided that the stamp duty rates levied by Maharashtra will be taken as a benchmark as it accounts for 70 per cent of the total collection. It was amended to state that the stamp duty will have to be paid by either the buyer or the seller of financial security, as against the current practice of levying the duty on both.