By Shailesh Yadav
New Delhi [India], July 15 (ANI): With Sensex witnessing record closing and Nifty hitting all-time high earnings, the Income Tax Department on Thursday has set a new benchmark by collecting more than expected revenue on account of Securities Transaction Tax (STT) in the first quarter of the financial year 2021.
Sources told ANI that the Income Tax Department has got a record Rs 5,373 crore in the head of STT collection during the first quarter of Financial Year 2021. It is an increase of 109 per cent as against the fisrt quarter of FY 2020.
During the first quarter of 2020 Income Tax department has got a collection of Rs 2,568 crore as STT collection. During this quarter Sensex and Nifty has gained 6 per cent and 7 per cent respectively in the April-June quarter.
The Income Tax department has set direct tax collection for this fiscal year of Rs 11.08 lakh crore. Out of this collection from STT target for the current fiscal has been set at Rs 12,000 crore. STT is levied at the time of purchase and sale of on listed/unlisted shares in the stock market, derivatives, equity-oriented Mutual Funds, debentures and bonds.
STT varies from 0.1 per cent to 0.001 per cent on shares, derivatives, equity-oriented mutual funds, debentures and bonds.
Sources told ANI that this is the result of the historic gain of stock markets. Collection trend is very encouraging and if the pace of this trend continues then the department will be able to achieve the set target in or around the second quarter of FY21.
According to sources, the net direct tax collections between April 1 and July 3 stood at Rs 2.49 lakh crore, compared to Rs 1.29 lakh crore over the corresponding period of the preceding year, representing an increase of 91 per cent over the collections of the previous year. Net Direct Tax collections for the financial year (FY) 2021-22 have grown at a robust pace despite the disruption caused by the COVID-19 pandemic on the economy.
This is also a sign of economic recovery as the stock market is showing the belief that the fundamentals of the economy are strong enough and people are investing in the stock market.
Experts told ANI that individual investors are coming to the stock markets. The latest data shows that the Central Depository Services India (CDSL) has opened an average of 1.8 million Demat accounts a month this year, three times more than the average 5,73,793 accounts opened a month in the first half of last year. The number of active Demat accounts across investors types with CDSL crossed the 40-million mark for the first time last week.
Nirav Vakharia, Head Equity Research, Share India Securities said that over the last year, the stock markets have risen sharply to register historic gains seen after a gap of many years. This has attracted new investors, most of them on a work-from-home mode due to lockdown, they spent their time looking for investment opportunities in equities.
"CDSL has opened 2 crore more accounts in 2021 itself, taking total no to over 6.3 crore demat accounts in the country. It shows that investors are fancying for continued gains over medium to long term," Vakharia said. He further added that as the trading volume grows, STT would certainly grow further. (ANI)