Listed brokerages may come under pressure at the bourses as Parthasarathi Shome Committee – looking to rationalise the proposed General Anti Avoidance Rule tax regime – has suggested a hike in the Securities Transaction Tax (STT), which is levied on stock transactions. However, the panel recommended abolition of capital gains tax levied for transfer of securities or from business income. In its draft report, the panel has said that “the Government should abolish the tax on gains arising from transfer of listed securities, whether in the nature of capital gains or business income, to both residents as well as non-residents. In order to make the proposal tax neutral, the Government may consider increasing the rate of STT appropriately. The Union Budget this year had proposed a reduction in STT from 0.125 per cent to 0.1 per cent on cash delivery transactions. STT was introduced in 2004. Though these are recommendation only, the sentiment could affect stocks such as Motilal Oswal, Religare, Inda Infoline, Edelweiss and Geojit Securities.

With reference to report “Shome panel report could hit broking firms” ( Business Line , September 3), Religare Enterprises clarifies that Religare Securities Ltd, retail broking arm of Religare Enterprises, is not a listed entity. The error is regretted.