Continuous efforts are being made to strengthen transparency and compliance in the Indian capital market. Recently, the National Stock Exchange of India Limited (NSE) issued an important circular to its member brokers and sub-brokers.
Let us understand what circular has been issued and what it means for all stakeholders in the market.
What’s Happening?
In a circular issued on March 10, 2026, the NSE has asked brokers and sub-brokers to provide details of the collection and retention of excess STT for FY 2023-24 and prior years up to March 31, 2023, directly to the Exchange. Members must comply within seven days from the date of publication of the circular.
The Joint Commissioner of Income Tax (Range 7(1)) wrote a letter to the NSE on March 5, 2026, highlighting cases where some brokers collected excess STT from investors but did not deposit it into the government account. The NSE has directed that brokers must immediately remit the excess amount along with the applicable interest.
The Rising Trend of STT Collection
STT was introduced in 2004. It is a stable source of revenue levied on equity and derivative trading. With the increase in trading activity over the past few years, there has been a sharp rise in STT collections. According to available data, the collection stood at Rs 23,191 crore in FY22, which increased to Rs 25,085 crore in FY23. In FY24, it rose further to Rs 33,778 crore. The sharpest jump was seen in FY25, when the collection reached Rs 52,197 crore.
This continuous growth clearly reflects the increasing participation of investors in the market. However, as the amount collected grows, the responsibility for accurate calculation and timely deposit also becomes more important. The issue of excess collection has come to light amid this rising volume.
Process of Excess STT Remittance
Brokers will have to provide complete details of the excess STT to the NSE. The remittance must be done immediately, and an interest of 1% will be charged for every month of delay. The NSE will deposit this amount into the government account based on information received from the Income Tax Department.
This circular is a follow-up to the previous circular dated March 19, 2025, in which similar disclosures were sought for FY23 and earlier years. The NSE has also made arrangements for designated officers to address queries from members.
This sends a clear message to brokers that STT compliance does not end with collection. Depositing the correct amount on time is equally important. Such measures further strengthen the credibility of the market.
What Does This Mean for Investors?
From an investor’s perspective, this directive is positive. When brokers collect excess STT, the amount essentially belongs to the investors. Ensuring that it is deposited into the government account helps maintain fairness and transparency in the system.
Rising STT collections also reflect the growing maturity of the market. Investors can trade with greater confidence as transparency and regulatory oversight continue to improve. In the long run, such measures help protect market stability and safeguard investor interests.
What’s Next?
STT collection is expected to rise further in the coming years. Estimates suggest that collections for FY26 could reach Rs 63,670 crore. In this scenario, stricter compliance will play an important role in strengthening the market ecosystem.
Brokers will need to pay closer attention to the accurate calculation of STT to avoid excess collection in the future. This proactive approach by the NSE will help maintain the integrity of the capital market while supporting the steady growth of government revenue.
It also sends a clear signal to both investors and brokers that adherence to regulations remains essential for a well-functioning market. With stronger compliance, the Indian capital market can continue to become more reliable and attractive.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
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