The Hindu Business Line : Evidence of payment of securities transaction tax

THE National Stock Exchange has received queries from various quarters with respect to evidence of payment of securities transaction tax for claiming deduction under Section 88E of the Income Tax Act.

In this regard, it may be noted that the Central Board of Direct Taxes has issued notification no. 1dated January 6, 2005. The notification can be accessed at the link — http://www.incometaxindia.gov.in/NotificationsIncometaxact/2005/0120050106.asp

As may be seen, the assessee is required to furnish self-verified Form 10DBin respect of evidence of payment of securities transaction tax paid on the value of transactions entered into by him on a recognised stock exchange for claiming deduction under Section 88E of the Income-tax Act along with his return of income.

Notification:

In exercise of the powers conferred by Section 295 of Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes makes the following rules further to amend the Income-tax rules:

These rules may be called the Income-tax (First Amendment) Rules, 2004.

They shall come into force from the date of their publication in the official gazette.

The evidence of payment of securities transaction tax which is required to be furnished along with the return of income by the assessee under first proviso to Section 88E:

On value of transaction entered into by him in a recognised stock exchange, shall be in Form No. 10DB and shall be verified in the manner indicated therein;

On value of transaction of sale, by him, of a unit of an equity oriented fund to the Mutual Fund, shall be in Form No. 10DC and shall be verified in the manner indicated therein.'

Instructions:

Where an assessee has entered into transactions in a stock exchange under different client code through the same stock broker, details in this Form be filled separately for each such client code.

Separate Form be furnished in respect of transactions entered into in different stock exchanges and also for the transactions entered in same stock exchange through different stock brokers.

The Form be furnished separately for the transactions with each Mutual Fund.

Details of securities transaction tax paid on sale of units of various equity-oriented fund under a Mutual Fund be given separately.

(Source: www.nseindia.com)

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