Description

NSE directs all members to furnish details of excess STT collected and retained for FY 2023-24 and prior years, and remit the amount with 1% monthly interest within 7 days, as per Income Tax department instructions.

Summary

NSE has issued a circular directing all members (brokers/sub-brokers) to furnish details of excess Securities Transaction Tax (STT) collected and retained for FY 2023-24 and preceding years (as on March 31, 2023), and to remit the excess STT along with applicable interest immediately. This follows instructions from the Joint Commissioner of Income Tax, Range 7(1), and is a continuation of an earlier NSE circular dated March 19, 2025.

Key Points

  • Continuation of NSE circular dated March 19, 2025 (Ref: NSE/FATAX/67183) regarding Excess STT Retained for FY 2022-23 and prior years
  • Joint Commissioner of Income Tax Range 7(1) has identified excess STT collected by some members that was not remitted to the Government for FY 2023-24 and prior years
  • Members must furnish details of excess STT retained as on March 31, 2023 directly to NSE
  • Excess STT must be remitted with interest at 1% per month for every month of delay
  • Compliance must be completed within 7 days of publication of this circular
  • NSE will deposit the collected amounts to the Government Account immediately upon receipt
  • All correspondence should be captioned ‘Excess STT Retained-NSE’

Regulatory Changes

No new regulatory framework introduced. This circular enforces existing STT remittance obligations under Income Tax department directives. The instruction emanates from the office of the Joint Commissioner of Income Tax Range 7(1) vide letter no. ITBA/COM/F/17/2025-26/1086923221(1) dated March 5, 2026.

Compliance Requirements

  • All NSE member brokers and sub-brokers must review their STT records for FY 2023-24 and all preceding years
  • Submit details of any excess STT collected and retained (position as on March 31, 2023) directly to National Stock Exchange of India Ltd.
  • Simultaneously intimate the Income Tax department office of the Joint Commissioner of Income Tax Range 7(1)
  • Remit the excess STT amount along with interest at 1% per month for each month of delay
  • Complete all of the above within 7 days of the circular’s publication date (March 10, 2026)
  • Contact for clarifications: Mr. Kunal Mehta or Ms. Bhoomi Chitalia at taxation@nse.co.in or 022-26598140 / 26598100 Ext. 23059 / Extn. 22586

Important Dates

  • March 5, 2026: Date of Income Tax department letter directing NSE to issue this circular
  • March 10, 2026: Date of this circular
  • March 17, 2026 (approx.): Deadline for member compliance (7 days from March 10, 2026)
  • March 31, 2023: Reference date for quantifying excess STT retained
  • FY 2023-24 and prior years: Period covered by this directive

Impact Assessment

This circular has a moderate financial impact on NSE member brokers who may have inadvertently retained excess STT. Members who have such excess amounts face a compulsory remittance obligation with interest penalty of 1% per month, which could be substantial depending on the amount and duration of retention. The 7-day compliance window is tight, requiring immediate internal review of STT records. Failure to comply could attract further regulatory scrutiny from both NSE and the Income Tax department. The broader market and trading operations are not directly affected.

Impact Justification

Mandatory compliance directive from Income Tax department requiring brokers/sub-brokers to report and remit excess STT with interest within 7 days; non-compliance carries financial and regulatory risk.