In a circular, SEBI has clarified that stamp duty tax is also applicable on units of AIFs.
The market regulator has asked AIFs to appoint registrar and transfer agents (RTAs) to collect stamp duty tax. However, AIFs can keep the collected stamp duty tax in a designated bank account till they appoint RTAs.
With this, AIFs will be in line with mutual funds, ULIPs and NPS as there is incidence of double stamp duty taxation on AIFs as well.
AIF investors will have bear to the burden of stamp duty tax twice – at investor level (when he purchases MF units) and at portfolio level (when the fund manager executes transactions). While the first taxation will be levied upfront, it will be adjusted to scheme’s TER in the second incident.
The government has imposed stamp duty tax of 0.005% on purchase of units of AIFs. This essentially means that AIF players will allot units after deducting stamp duty tax of 0.005% on invested amount.
At portfolio level, the government has imposed stamp duty of 0.0001% on transfer and re-issue of equity and equity related instruments. For debt instruments, the government will levy stamp duty tax of 0.015% on delivery transactions and 0.003% on intraday and option transactions. In case of equity IPOs and fresh issuance of debt papers, the government has imposed stamp duty tax of 0.005%.
The stamp duty tax on futures both equity & commodity and currency & interest rate derivatives would be 0.002% and 0.0001, respectively. There will be no stamp duty tax on transactions of government securities. Finally, the government would levy stamp duty of 0.00001% on transaction of repo on corporate bonds.