Not paying much attention to the sentiments of the stock market, Finance Minister P Chidambaram through Chapter VII (Clasues 86 to 105) of the Finance Bill proposes to levy securities transaction tax. The exact date of the implementation would be announced in the official gazette of the central government.

A transaction tax of 0.15 per cent would be levied on all taxable securities transactions entered into by an individual in any recognised stock exchange. The tax would have to be paid by the purchaser of the securities.

Every recognised stock exchange is required to collect the securities transaction tax from every purchaser at the rates specified in Section 88. The stock exchange shall, within the prescribed time after the end of each financial year, prepare and deliver to the assessing officer or any other agency authorised by the Board, the prescribed form duly verified giving all the required details.

Every assessee who fails to credit the securities transaction tax or any part thereof as required under Section 90, to the account of the central government within the specified period mentioned in that section, shall pay simple interest at the rate of one per cent.

Any assessee who fails to collect the whole or any part of the securities transaction tax as required under Section 90; or having collected the securities transaction tax, fails to pay such tax to the Central Government in accordance with the provisions of sub-section (2) of that section, shall be liable to pay additional tax (as mentioned in sub-section (3) of that section), or interest in accordance with the provisions of Section 94. The penalty amount has been set at Rs 1,000 per day.

The value of taxable securities transaction:

(a) in the case of taxable securities transaction relating to "option in securities", shall be the aggregate of the strike price and the option premium of such "options in securities";

(b) in the case of taxable securities transaction relating to "futures", shall be the price at which such "futures" is traded; and

(c) in the case of any other taxable securities transaction, shall be the price at which such securities are purchased.

If an assessee fails to furnish the necessary return that he is liable to under sub-section (1) of Section 91 or by any notice given under sub-section (2) of that section, he shall be liable to pay, by way of penalty, a sum of Rs 100 for every day during which the failure continues.

If a person makes a statement in any verification under this Chapter or any rule made under it, or delivers an account or statement, which is false, and which he either know or believes to be false, he shall be punishable with imprisonment for a term which may extend to three years and with fine.

Clause 87 provides that unless the context otherwise requires:

"Appellate Tribunal" means the Appellate Tribunal constituted under section 252 of the Income-tax Act, 1961:

 "Assessing Officer" means the Income-tax Officer or Assistant Commissioner of Income-Tax or Deputy Commissioner of Income-Tax or Joint Commissioner of Income-Tax or Additional Commissioner of Income-Tax who is authorised by the Board to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under this Chapter;

"Board" means the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963;

"derivative" has the meaning assigned to it in clause (aa) of section 2 of the Securities Contracts (Regulation) Act, 1956;

"Government security" has the meaning assigned to it in clause (b) of section 2 of the Securities contracts (Regulation) Act, 1956;

"option in, securities" has the meaning assigned to it in clause (d) of section 2 of the Securities Contracts (Regulation) Act, 1956;

"option premium" means the premium payable by the purchaser of an "option in securities at the time of such purchase;

"prescribed" means prescribed by rules made by the Board under this Chapter;

"recognised stock exchange" shall have the same meaning as in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956;

"securities" has the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956;

"securities transaction tax" means tax that can be levied on the taxable securities transactions under the provisions of this Chapter;

"strike price" Means the price at which the "option in securities" may be exercised on the expiry date of such option;

"taxable securities transaction" means a transaction of purchase of securities entered into in a recognised stock exchange in India;

words and expressions used but not defined in this Chapter and defined in the Securities Contracts (Regulation) Act, 1956, the Income-tax Act, 1961 or the rules made thereunder, shall apply, as far as possible, in relation to securities transaction tax.

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