Let me quickly run you through what this uniform stamp duty is all about and what do uniform stamp duties mean for stock markets? During the week, the Ministry of Finance issued a circular announcing uniform stamp duty on all financial market transactions effective 09th January 2020. This had been on the cards for quite some time since Piyush Goyal first made the announcement in the interim budget 2019. Here is what it means.

What are the key outcomes of uniform stamp duty in India? Currently, when you enter into a capital market transaction, there is stamp duty payable on a per contract note basis. This amount is mentioned at the bottom of the contract note. The whole problem today is that stamp duties are levied by the state governments and each state levies its own rate of stamp duties on different financial products. Brokers are required to charge stamp duty to customers at the rates applicable to the state where the client’s account address is located. Then, these stamp duties are remitted by the broker to the respective states.

Under the new arrangement, the stamp duty will be charged on financial products at a uniform rate and the broker will only have to remit the amount to the exchange. Here are the rates of stamp duty applicable.

Equity Delivery

Equity Intraday

Futures (equity and commodity)

Options (equity and commodity)

Currency

0.015%

0.003%

0.002%

0.003%

0.0001%

In the above cases, the stamp duty will apply on notional value of options and only on the buy side of equity delivery.