Description

BSE issues circular directing member brokers/sub-brokers to disclose and remit excess STT collected and retained for FY 2023-24 and preceding years, as instructed by the Joint Commissioner of Income Tax, Range 7(1), Mumbai.

Summary

BSE has issued a circular to all member brokers and sub-brokers directing them to furnish details of any excess Securities Transaction Tax (STT) collected and retained for FY 2023-24 and preceding years (as on March 31, 2023), and to remit such excess STT to BSE Limited immediately. This circular is issued pursuant to notice no. ITBA/COM/F/17/2025-26/1086923338(1) dated March 05, 2026, from the Joint Commissioner of Income Tax, Range 7(1), Mumbai, under Section 102(1) of the STT provisions.

Key Points

  • BSE has directed all member brokers and sub-brokers to disclose excess STT collected and retained for FY 2023-24 and all preceding years as on March 31, 2023.
  • Excess STT must be remitted to BSE Limited, which will then deposit the amount to the Government account.
  • Interest at 1% per month is applicable for every month of delay in remittance.
  • Remittance must be made via Account Payee cheque drawn in the name of “BSE Limited”.
  • Cheques and details should be sent to Nikhil Kataria / Libin Mathews, Finance & Accounts Department, BSE Limited, 25th Floor, PJ Towers, Dalal Street, Fort, Mumbai – 400001.
  • For queries, brokers may contact bse.tax@bseindia.com or call 022-22728867.

Regulatory Changes

No new regulatory framework has been introduced. This circular enforces existing STT remittance obligations under Section 102(1) of the Securities Transaction Tax provisions. The Income Tax Department (Office of the Joint Commissioner of Income Tax, Range 7(1), Mumbai) has identified instances where excess STT was collected by brokers/sub-brokers but not remitted to the Government account, prompting BSE to issue this directive.

Compliance Requirements

  • All member brokers and sub-brokers must review their STT records for FY 2023-24 and all preceding years as on March 31, 2023.
  • Furnish details of any excess STT collected and retained directly to BSE Limited.
  • Remit the excess STT amount along with applicable interest (1% per month of delay) by Account Payee cheque payable to “BSE Limited”.
  • Send cheque and supporting details (excess STT collected + interest calculation) to the Finance & Accounts Department at BSE’s registered office.
  • Compliance is required within 7 days of publication of this circular.
  • Compliance must also be intimated to the Office of the Joint Commissioner of Income Tax, Range 7(1), Mumbai.

Important Dates

  • March 05, 2026: Income Tax Department notice issued (ITBA/COM/F/17/2025-26/1086923338(1)).
  • March 11, 2026: BSE circular published.
  • Within 7 days of March 11, 2026 (by ~March 18, 2026): Deadline for member brokers/sub-brokers to furnish details and remit excess STT to BSE Limited.
  • Reference period: FY 2023-24 and all preceding years as on March 31, 2023.

Impact Assessment

This circular has a targeted but significant compliance impact on brokers and sub-brokers who may have inadvertently or otherwise collected excess STT and not remitted it to the Government. Non-compliance carries a financial penalty in the form of 1% monthly interest on outstanding amounts. Brokers that have retained excess STT face both financial liability (interest charges) and regulatory risk (income tax scrutiny under Section 102(1)). The broader market is not directly affected; however, this highlights increased income tax department scrutiny of STT compliance among market intermediaries. BSE acts as an intermediary collection agent in this process, consolidating remittances before depositing to the Government account.

Impact Justification

Mandatory compliance directive from income tax authorities requiring brokers to disclose and remit excess STT within 7 days, with interest penalty of 1% per month on delayed remittance. High importance due to regulatory and tax compliance obligations; medium impact as it targets specific brokers who collected excess STT rather than broader market operations.