Mumbai (Maharashtra) [India], July 31 : The Association of National Exchanges Members of India (ANMI), a leading body representing stock brokers and trading members across the country's capital markets, has urged the government to either reduce the Securities Transaction Tax (STT) or abolish the Long-Term Capital Gains (LTCG) tax on equities to encourage greater retail participation in the stock market.
Speaking to media on the sidelines of the 31st ANMI Foundation Day celebrations at the National Stock Exchange (NSE) in Mumbai, ANMI National President Kamlesh Shroff said the association has already submitted its recommendations to the Finance Ministry.
"We have submitted recommendations earlier to the Ministry. One option is that STT can actually be reduced," Shroff said.
He said another option is to retain the Securities Transaction Tax while providing relief through a rebate under Section 88, similar to the earlier tax regime when capital gains tax was not applicable.
"Either you keep the STT at the same place and give the Section 88 rebate, or do away completely with Long-Term Capital Gains (LTCG) tax specifically, so that the investor cult--which is going up North--benefits everyone and people feel encouraged to enter the market," he told ANI.
According to Shroff, easing the tax burden on investors would help attract more retail participation and further strengthen India's growing equity market.
ANMI is a nationwide association representing stock brokers and trading members of Indian stock exchanges. The body regularly engages with the Securities and Exchange Board of India (SEBI), stock exchanges and the government on issues related to market regulation, taxation, investor protection and the development of India's capital markets.
During the interaction, Shroff also expressed confidence that foreign institutional investor (FII) flows would return to India once global markets stabilise and geopolitical uncertainties ease.
He also called for a graded approach to cybersecurity compliance for smaller brokers, saying compliance costs should be aligned with the size of brokerage firms.
He also shared that the biggest growth drivers for the exchanges in the country over the next decade will be the new products by the exchanges. He added that NSE has brought in EGRs (Electronic Gold Receipts), and commodity markets are slowly and steadily getting better liquidity. New products that click with next-gen investors--given that the average investor age has already gone down--will work well.