Union Cabinet on Wednesday gave post-facto approval to amendments to Finance Bill 2023 which was approved by Parliament last month. The Cabinet approved amendments to the Finance Bill introduced in Rajya Sabha on March 27, sources said.
Amendments which included rectification of figures with regard to rate of Security Transaction Tax (STT) to be levied on sale of options as well as futures, sources said. It was more of procedural issue, sources said, adding, Parliament passed the amended Finance Bill on March 27.
The amendment proposed that STT at the rate of 0.0625 per cent shall be levied on the sale of options as against the current rate of 0.05 per cent. The corrected rate hike for STT on options means a tax of Rs 6,250 on trade value of Rs 1 crore instead of Rs 5,000 earlier. This became effective from April 1.
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In the Finance Bill approved by Lok Sabha on March 24, the proposed change in the STT rate on options from 0.017 per cent to 0.021 per cent had led to a lot of confusion amongst market participants. Later the finance ministry clarified that the securities transaction tax on selling options in the derivatives market will be increased to 0.0625 per cent from 0.05 per cent.
In percentage terms, STT on sale of futures has been hiked from 0.01 per cent to 0.0125 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. Finance Minister Nirmala Sitharaman had introduced 64 official amendments to the Finance Bill which was tabled in Parliament on February 1 along with the Budget proposals. The Finance Bill 2023 as passed by Parliament received the assent of President Droupadi Murmu on March 31, 2023.
