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Right time to scrap tax on share trading: ICICI Securities.
Posted on: 13-06-2009 , 04:: | DY365 Bureau

Pitching for the need to lower investors' costs for trading in stocks,top equity brokerage house ICICI Securities today said the government should look into phasing out the Securities Transaction Tax (STT).

"We believe that to create more efficiency in the market you need to reduce the transaction cost so that one can buy and sell freely. So we feel that perhaps it is good time to review that decision (to impose STT)," I-Sec MD & CEO Madhabi Puri Buch told over telephone.

"It was brought in at a time when perhaps it was considered appropriate. If we look at it in the changed environment and look back at the decision and see what has been its impact, it appears that it may be worth re-looking again," Buch said, when asked if she endorsed the demand for phasing out the tax.

The tax, which was introduced in Budget 2004-05 and currently stands at 0.125 per cent of every trade value, is imposed on both buyers and sellers of the shares.

The government collected over Rs 8,500 crore through STT in 2007-2008, but it fell to a little over Rs 5,400 crore in last fiscal and in the first two months of the current financial, they are said to be down by 25 per cent at Rs 750 crore.

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