Securities Transaction Tax (1st Amendment), Rules, 2022

The Central Board of Direct Taxes vides a Notification 9/2022 dated 18/01/2022 has notified the Securities Transaction Tax (1st Amendment), Rules, 2022. The amendment clarifies that the Person responsible for collection and payment of securities transaction tax in case of the Insurance Company shall be the managing director or a whole-time director, as authorized by the Board of Directors of such company.

Synopsis of Securities Transaction Tax (1st Amendment), Rules, 2022

CBDT has notified Provision for collection and payment of securities transaction tax in case of insurance company introduced vide Securities Transaction Tax (1st Amendment), Rules, 2022

Securities Transaction Tax (1st Amendment), Rules, 2022 inserts new Securities transaction tax Rule 5A on ‘Person responsible for collection and payment of STT in the case of Insurance Company’ and
This new rule also amends Securities transaction tax (STT) Rules 6, 7and 8.
Also, CBDT has inserted new STT FORM 2A for STT Return by an Insurance Company,

New Rule 5A of Securities Transaction Tax

Rule 5 of Securities transaction tax specifies the Person responsible for collection and payment of securities transaction tax in case of a Mutual Fund”, Securities Transaction Tax (1st Amendment), Rules, 2022 has inserted Rule 5A which specifies that the Person responsible for collection and payment of securities transaction tax in case of Insurance Company shall be the managing director or a whole-time director, as authorized by the Board of Directors of such company.

Amendment in Rule 6 of STT - Payment of Securities Transaction Tax

Rule 6 which specifies “Payment of Securities Transaction Tax” the following has been substituted vide STT (1

st Amendment) Rules, 2022. Every recognized stock exchange or the trustee of every Mutual Fund or such other person managing the affairs of the mutual fund or the managing director or a whole-time director duly authorized by the Board of Directors of an insurance company is required to collect and pay securities transaction tax under section 100 of the Act. The managing director or a whole-time director duly authorized by the Board of Directors of an insurance company will pay the amount of Security TRansaction tax to the credit of the Central Government by remitting it into any branch of the Reserve Bank of India or of the State Bank of India or any authorized bank accompanied by a securities transaction tax challan.

Amendment in Rule 7 of STT

The amended Rule 7 of Securities Transaction Tax specifies that The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats, and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies about furnishing the returns in Form No. 1, Form No. 2 and Form No. 2A.”;

Amendment in Rule 8 of STT Rules

Rule 8 which specify “Return by whom to be signed” the following sub-rule 8(c) shall be inserted namely: - “

In the case of an insurance company by the managing director or a whole-time director as defined in clauses (54) and (94) of section 2 of the Companies Act, 2013 (18 of 2013) a duly authorized by the Board of Directors of such company in this behalf”

FORM No. 2A

The CBDT has also notified Form no. 2A for filing of return of Taxable Securities Transactions for Insurance Company. The insurance company needs to provide the following details in the form:

Name of the Insurance Company
Date of Registration/Incorporation under the Companies Act, 2013
Permanent Account Number (PAN)
Number of equity-oriented funds
Value of taxable securities transactions
Total securities transaction tax collectible/collected/paid
Securities transaction tax payable/refundable
Interest payable under section 104/ Interest paid
Details of Equity Oriented Funds concerning ULIP
Details of securities transaction tax

FORM NO. 2A of Securities Transaction Tax is attached here for reference:

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Frequently Asked Questions

Common questions about Securities Transaction Tax Rules 2022: Amendments for Insurance.

The Securities Transaction Tax (1st Amendment) Rules, 2022 specify that the managing director or a whole-time director, as authorized by the Board of Directors of the insurance company, shall be responsible for collecting and paying the Securities Transaction Tax.

The new Rule 5A, introduced by the Securities Transaction Tax (1st Amendment) Rules, 2022, specifically clarifies the person responsible for collecting and paying Securities Transaction Tax in the case of insurance companies. This amendment aims to provide clarity and streamline the process for insurance companies.

According to the amended Rule 6, the managing director or a whole-time director authorized by the Board of Directors of an insurance company will pay the amount of Securities Transaction Tax to the credit of the Central Government by remitting it into any branch of the Reserve Bank of India, the State Bank of India, or any authorized bank, accompanied by a Securities Transaction Tax challan.

The amendment in Rule 7 empowers the Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) to specify the procedures, formats, and standards for ensuring secure capture and transmission of data related to Securities Transaction Tax returns. This amendment aims to enhance data security and streamline the filing process.

The amendment in Rule 8 introduces a new sub-rule 8(c), which specifies that in the case of an insurance company, the return of Taxable Securities Transactions shall be signed by the managing director or a whole-time director, as defined in the Companies Act, 2013, duly authorized by the Board of Directors of the company.

The Central Board of Direct Taxes (CBDT) has introduced Form No. 2A specifically for insurance companies to file their returns of Taxable Securities Transactions. This form requires insurance companies to provide details such as their name, registration details, Permanent Account Number (PAN), value of taxable securities transactions, Securities Transaction Tax collected or paid, and details of equity-oriented funds related to Unit-Linked Insurance Plans (ULIPs).

The amendment in the Securities Transaction Tax Rules does not directly affect mutual funds. The existing Rule 5, which specifies the person responsible for collecting and paying Securities Transaction Tax in the case of mutual funds, remains unchanged.

In Form No. 2A, insurance companies need to provide their name, date of registration/incorporation under the Companies Act, 2013, Permanent Account Number (PAN), number and value of equity-oriented funds, value of taxable securities transactions, total Securities Transaction Tax collectible/collected/paid, Securities Transaction Tax payable or refundable, interest payable or paid under section 104, and details of equity-oriented funds concerning Unit-Linked Insurance Plans (ULIPs).

The amendment does not directly affect recognized stock exchanges. The existing provisions related to the collection and payment of Securities Transaction Tax by recognized stock exchanges remain unchanged.

The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) specifying procedures, formats, and standards under the amended Rule 7 aims to ensure secure capture and transmission of data related to Securities Transaction Tax returns. This measure is intended to enhance data security, archival, and retrieval policies for filing the relevant returns (Form No. 1, Form No. 2, and Form No. 2A).