FM moves amendment to Finance Bill in Parliament to correct STT rate

Finance minister Nirmala Sitharaman on Monday moved an amendment to the Finance Bill in Rajya Sabha to correct the figures with regard to rate of Security Transaction Tax (STT) to be levied on sale of options as well as futures.

The amended Finance Bill 2023 by correcting STT rate has been returned to Lok Sabha, sources said.

The amended Bill is likely to be taken up by Lok Sabha either today or tomorrow and thereafter the Budgetary exercise would be complete. The Lok Sabha is adjourned till 4 pm.

In the Finance Bill 2023, passed by the Lok Sabha on Friday, the Securities Transaction Tax on options is proposed to be increased to 0.0625 per cent from 0.05 per cent and on futures contracts to 0.0125 from 0.01 per cent.

After the Lok Sabha cleared the Finance Bill, which has 64 official amendments, the finance ministry issued a statement saying that there was a typographical error in the amendments with respect to the change in STT on options trading.

The error, the finance ministry said, will be rectified in accordance with the extent procedure of the government of India.

As per the amendments, the STT on options has been increased from 0.017 per cent to 0.021 per cent.

"In case of STT, the rate is proposed to be changed from 0.05 per cent to 0.0625 per cent. There was a typographical error which is being corrected," the ministry said.

In percentage terms, STT on sale of futures has been hiked from 0.01 per cent to 0.0125 per cent and in case of options it has been hiked from 0.05 per cent to 0.062 per cent.

Traders in the futures segment will now have to pay STT of Rs 1,250 on Rs 1 crore of turnover against the earlier levy of Rs 1,000. The new rules will come into effect from the new financial year 2023-24.