Stories
Kotak AMC Chief Nilesh Shah Urges Government to Review Dual Capital Gains and STT Taxes
- •Nilesh Shah of Kotak Mahindra Asset Management Company has called on the government to review the combined burden of Securities Transaction Tax and capital gains tax, arguing investors face dual taxation.
- •Shah pointed out that STT was originally introduced to replace capital gains tax, but both taxes were later reinstated and increased, affecting both domestic and foreign investors.
- •He highlighted SEBI research showing retail traders lost nearly four lakh crore rupees in futures and options trading over five years, emphasizing the need to direct savings into productive investments rather than speculation.
- •Shah suggested plugging savings leakages from digital fraud, Ponzi schemes, crypto activities, and gaming to better utilize India's thirty percent gross domestic product savings rate.
- •While acknowledging that the Finance Ministry is listening to industry concerns, Shah could not predict a timeline for when or if the government might provide tax relief.
Key Questions Answered
Nilesh Shah called on the government to review the combined burden of the Securities Transaction Tax (STT) and capital gains tax, arguing that investors are facing a form of dual taxation. He noted that STT was initially introduced in lieu of capital gains tax before both taxes were brought back and increased over time.
Shah highlighted SEBI research showing that retail traders suffered nearly ₹4 lakh crore in losses through futures and options (F&O) trading across a five-year period. He emphasized the need to direct India's savings away from such speculative activities and toward productive investments.
Shah stated that India can make better use of its domestic savings by plugging leakages caused by digital fraud, Ponzi schemes, cryptocurrency activities, gaming, and speculative trading. He argued that tax policies should actively encourage legitimate savings and wealth-building in financial markets rather than discourage investors.
