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<\/p>\nThe Union government’s revenue from securities transaction tax (STT) is on track to exceed its Budget projection for the current fiscal year, with the mop-up already surpassing 50 per cent of the annual estimate.<\/p>\n
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Provisional figures reveal that the Centre has collected approximately Rs 14,000 crore in the first half of this fiscal year up to September, according to a government official.<\/p>\n
This amount exceeds half of the full-year target of Rs 27,625 crore set for FY24.<\/p>\n
The increase is largely attributed to the ongoing buoyancy in the stock markets, increased STT rates on futures and options sales, and the addition of unique investors.<\/p>\n
These factors have stimulated trading activity and bolstered STT collections.<\/p>\n
Over the past few years, securities tax has emerged as a significant contributor to the Centre’s tax kitty, said officials.<\/p>\n
The influx of new investors in both cash and derivative segments of stock exchanges has led to a surge in STT collections.<\/p>\n
The 2023-24 Budget increased the STT on sales of options and futures by 25 per cent each.<\/p>\n
Despite initial concerns that this might impact trading volumes, the market has instead experienced a surge since the new rule took effect on April 1.<\/p>\n
Besides, the addition of 10 million unique investors in just eight months is anticipated to be a key factor in this surge.<\/p>\n
During the April-September 2023 period, the Nifty50 gained 13 per cent, while the Nifty Midcap 100 and the Nifty Smallcap 100 rose by 35 per cent and 42 per cent, respectively.<\/p>\n
This marked the best first-half performance for the broader market since H1FY21, when stocks had rallied from their Covid lows.<\/p>\n
In September alone, the Nifty 50 index saw a swing of 967 points or 4.8 per cent – most in six months.<\/p>\n
It reached a lifetime closing high of 20,192 on September 15 before some pullback.<\/p>\n
The Sensex also made a record high of 67,839, after ending in green for the first 11 trading sessions of the month.<\/p>\n
The broader market Nifty Midcap 100 and Nifty Smallcap 100, too, scaled fresh peaks.<\/p>\n
Experts said the buoyancy in the markets and a high number of IPOs boosted trading volumes.<\/p>\n
Officials indicated that there could be a possibility of an increased Revised Estimate for STT for the current fiscal year, and even a higher collection target for the next fiscal year.<\/p>\n
This trend has been observed over the past three-four years.<\/p>\n
In FY23, for instance, the Centre collected Rs 24,960 crore as STT against a Budget Estimate (BE) of Rs 20,000 crore.<\/p>\n
The target was later revised to Rs 25,000 crore for that year.<\/p>\n
FY22 also witnessed a multifold jump in the collection figures, with actual realisation being Rs 23,191 crore against a budgeted Rs 12,500 crore.<\/p>\n