PremiumNikhil Kamath said the investment industry will benefit if the Securities Transaction Tax is abolished, as both long-term capital gains (LTCG) and short-term capital gains (STCG) are in place
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NEW DELHI : Nikhil Kamath, co-founder of True Beacon and Zerodha, Thursday urged the government to consider abolishing the Securities Transaction Tax (STT) on equity trade in the Union Budget 2022, which will be presented by Finance Minister Nirmala Sitharaman on February 1, 2022.
The move to relieve the traders of the STT on equity trade will boost the capital markets and encourage the new investors to start trading, he said.
Kamath said, "The investment industry will benefit if the Securities Transaction Tax is abolished, as both long-term capital gains (LTCG) and short-term capital gains (STCG) are in place," news agency PTI said.
The Zerodha co-founder said if the government doesn't want to intervene with the STT, it could look at removing the tax on LTCG.
Kamath advocated for easing the listing norms in the country while tightening penalties for violation of laws.
He said, "While companies reach out to the government requesting a change to existing regulations, allowing unlisted Indian companies to list abroad, I believe it is the right time to work in-house."
Kamath said entry barriers for companies to get listed in India are very high, but once listed, the penalty for violations is minimal, making investors, especially retail, susceptible to a lot more risk.
"We should be looking at it the other way around to foster innovation while keeping a check on corporate governance," Kamath added.
Kamath said bringing taxation of Category-III Alternative Investment Funds (AIFs) in line with Category-I and Category-II AIFs will be a shot in the arm for the budding hedge funds industry, the agency said.
The STT was introduced in 2004 on transactions in different types of securities. Its rate presently varies from 0.025% to 0.25% depending upon the type of security traded and transaction — whether sale or purchase.
