CBDT Formats/ Guidelines/ Filing Procedure on STT Forms 1, 2, 2A

CBDT has notified the formats of Form 1, 2 & 2A meant for e-filing of return of taxable transactions under the Securities Transaction Tax (STT) by Recognized Stock Exchanges/ Mutual Funds/ Insurance Companies, etc., latest by 30th June following the end of relevant financial year, along with detailed procedure/ guidelines/ data structure rules, for submission thereof, vide Systems Notification 2/2022.

CBDT Income Tax (Systems) Notification 2/2022 dt. 24/06/2022: Formats and Guidelines on Filing Procedure of STT Form 1, 2, 2A

CBDT Formats/ Guidelines/ Filing Procedure on STT Forms 1, 2, 2A Systems Notification 2/2022

1. As per Section 101 of the Securities Transaction Tax, every recognized stock exchange or the prescribed person in the case of every Mutual Fund [or insurance company] [or the lead merchant banker in the case of an initial public offer] [or an initial offer] shall, within the prescribed time after the end of each financial year, prepare and deliver or cause to be delivered a return to the Assessing Officer or to any other authority or agency authorized by the Board.

2. For the purposes of filing of Securities Transaction Tax return electronically, CBDT has issued Notification No. 9/2022 dt. 18/01/2022. As per the notification, a new class of person, i.e. Insurance Company, has been made responsible for collection and payment of securities transaction tax. A new Form No. 2A has also been introduced as per the said notification, to be filed by Insurance Company for furnishing Securities Transaction Tax return. The new sub rule 2A of rule 7 empowers Director General of Income Tax (Systems) to specify the procedures, formats and standards for ensuring secure capture and transmission of data.

3. All eligible reporting institutions having obligation to submit Securities Transaction Tax return are requested to submit the registration information as per Annexure A and send the signed copy in pdf format (size upto 1Mb) on ITD official email id at [email protected]. The guidelines for preparation and submission of Securities Transaction Tax Return have been mentioned in the STT Rules 2004 amended via notification 9 of 2022. The format of return (Form No. 1, Form No. 2 and Form No. 2A) to be submitted is given in Annexure B. The data structure rules are enclosed in Annexure C. Notification of 2004, Securities Transaction Tax, Rules dt. 29/09/2004 may be referred for class of persons responsible for filing Form No. 1 and Form No. 2. The new rule 5A inserted via Notification No. 9/2022 may be referred for class of persons responsible for filing Form No. 2A.

4. All the Reporting Institutions (class of person responsible) as defined in the Securities Transaction Rules 2004 and further modified by Securities Transaction Tax (1st Amendment), Rules, 2022 dt. 18/01/2022 are required to prepare the data file in prescribed format from their internal system. Reporting Institutions are required to submit the data files using SFTP Server using the login credentials (To be communicated separately).

5. Form No. 1, Form No. 2 and Form No. 2A is required to be signed, verified and furnished by the class of person responsible as defined in the Securities Transaction Rules 2004 and further modified by Securities Transaction Tax (1st Amendment), Rules, 2022 dt. 18/01/2022. The return of Securities Transaction Tax shall be furnished on or before the 30th June, immediately following the financial year in which the transaction has been registered or recorded.

6. The Reporting Institution is required to document and implement appropriate information security policies and procedures with clearly defined roles and responsibilities to ensure security of submitted return. The reporting person/ entity is also required to document and implement appropriate archival and retrieval policies and procedures with clearly defined roles and responsibilities to ensure that submitted return and related information are available promptly to the competent authorities.

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Securities Transaction Tax (1st Amendment), Rules, 2022

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