Zerodha co-founder Nithin Kamath recently shared an interesting observation about cryptocurrency transactions through a post on X (formerly Twitter). He had come across an ad for some cryptocurrency Futures & Options exchange in a leading newspaper and outlined the inconsistency in the application of the 1 percent TDS rule.
Nithin Kamath’s Request to FM Sitharaman
In comparison, he indicated that, all these platforms have taken the stance that the 1% TDS rule doesn’t apply to crypto F&O. For regular crypto transactions, 1% of the transaction is deducted as TDS. He requested Finance Minister Nirmala Sitharaman and the Ministry of Finance to look into this matter.
Impact of the SEBI Transparent Pricing Circular
Earlier, he also expressed his opinion on the new SEBI clear pricing circular where, he feels, the change will significantly affect brokers, traders, and investors. This rule mentions that any market infrastructure institution will have to be transparent while declaring charges levied by them including stock exchanges. That, therefore, could pass on the pressure for brokers to rework their pricing mechanisms.
Concerns Over Rise in Retail Participation in Options Trading
The sharp rise in the options trading turnover has put the market regulators on high alert. SEBI is reportedly setting a working group on margin requirements. Recently, there were also reports that said the returns from F&O trading will be treated as speculative income for the purpose of taxation and attract higher tax rate on them.
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