The National Stock Exchange of India Ltd (NSE) has issued a circular directing brokers and sub-brokers to disclose details of any excess Securities Transaction Tax (STT) collected from investors and retained for the financial year 2023-24 and earlier years. The exchange has also asked members to remit the excess amount along with interest for delays.
The directive was issued on March 10, 2026, following instructions from the Income Tax Department of India. According to the tax authority, certain market intermediaries had collected more STT than required but failed to deposit the excess amount into the government account.
Action Based on Direction from the Income Tax Authority
The development stems from a communication from the Joint Commissioner of Income Tax, Range 7(1), who highlighted cases where excess STT collected by brokers had not been remitted to the government for FY2023-24 and earlier years.
In a letter dated March 5, 2026, the tax authority requested the NSE to issue a circular instructing all exchange members, brokers and sub-brokers to furnish details of such excess collections. The communication specifically required members to disclose any excess STT retained as of March 31, 2023.
Members Given Seven Days to Comply
The circular requires members to submit the details under the caption "Excess STT Retained-NSE." Brokers and sub-brokers have been directed to comply with the instructions within seven days from the date of publication of the circular. Members must also remit the excess STT collected to the exchange immediately, along with interest at the rate of 1% for every month of delay.
NSE to Deposit Amount in Government Account
Once the excess STT and interest are received from brokers, the NSE will deposit the collected amount into the government account after informing the Income Tax Department.
The exchange clarified that the payment must be made to the NSE first, with proper intimation to the tax authorities. This mechanism ensures that any excess STT retained by members is eventually credited to the government treasury.
Earlier Circular Issued in 2025
This directive follows a previous NSE circular dated March 19, 2025, which addressed excess STT retained by exchange members for FY2022-23 and prior years. The latest circular extends the compliance requirement to cover FY2023-24 and earlier periods, ensuring that all excess tax collections are reconciled and deposited with the government.
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