To attract more investors into the stock market, the Bombay Stock Exchange has pitched for reduction in securities transaction tax (STT) and rationalisation of taxation norms for different financial products - a demand also made by the Securities and Exchange Board of India (Sebi) and other market entities.
The bourse has written to the government seeking rationalisation and reduction in STT.
"For us if you cannot reduce the STT overall, then you have to restructure STT to basically reduce it for delivery transactions," BSE's Managing Director and Chief Executive Officer Ashishkumar Chauhan said on Wednesday.
According to Chauhan, STT should be reduced for delivery transactions as it would also help in attracting investments.
Chauhan said at present, the tax is "lowest on options and highest on delivery transactions". So, effectively the tax policy itself seems to promote the derivatives transactions, he added.
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"Currently it is Rs 20,000 a crore... Rs 10,000 a crore on the buy (side) and Rs 10,000 a crore on sell (side) if you deliver the shares. It is almosty 20 times higher than intra-day trading or future trading or probably 1,000 times higher than the options trading," he said.
He was speaking at a conference organised by industry body Assocham.
The National Stock Exchange (NSE) has also put across similar demands with regard to STT.
Meanwhile, many listed entities have made representations to the exchange with respect to the new companies law, including provisions related to independent directors.
"Many of the (listed) companies have written to the BSE that some aspects of the new companies law should be relooked into. It is a sort of situation where (companies want to know) how to comply with the Companies Act," Chauhan said.
Under the Companies Act, 2013 - whose many provisions have come into force from April 1 - there are strict disclosure norms and compliance requirements.