'On one side Sebi is working on...': Zerodha's Nithin Kamath wants FM Nirmala Sitharaman to check an F&O anomaly

Zerodha co-founder Nithin Kamath in a post on X pointed to an anomaly in cryptocurrency transactions after he recently spotted an ad about a cryptocurrency F&O exchange in a leading daily. 

Pointing to the anomaly, Kamath said the 1% TDS rule is not applicable to crypto F&O. However, for regular crypto transactions, 1% of the transaction amount is deducted as TDS. 

In his post, Kamath urged Nirmala Sitharaman and the finance ministry to look into this discrepancy.

Kamath had recently commented on Sebi's new transparent pricing circular, which he believed will significantly impact brokers, traders, and investors.

The circular requires all market infrastructure institutions, including stock exchanges, to be transparent in how they levy charges, which could force brokers to adjust their pricing models.

Stock exchanges charge brokers a transaction fee based on their total monthly turnover, with higher turnovers receiving lower fees through rebates. This practice, common globally, allows brokers to earn a margin by charging customers more than what the exchange charges them.

Kamath said Zerodha had been able to offer free equity delivery trades due to the revenue from F&O trading. With the new regulations, this might no longer be possible, leading to potential changes in their zero brokerage structure or increased brokerage for F&O trades.

The surge in options trading turnover has drawn regulatory scrutiny, with SEBI setting up a working group to address concerns about the rise in retail participation. Kamath hopes that exchanges will pass on the benefits to customers by charging the lowest possible fees, minimizing the impact of increased F&O brokerage.