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

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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 (1st 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:

notification-9-2022-2-4 (1)

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