The stockbroker fraternity on Thursday reacted sharply to the announcement of turnover tax on equity transactions, fearing it would drive down the business volumes by more than half and squeeze the equity prices further.
"It is an adverse Budget for the capital markets as the Finance Minister proposed a huge turnover tax on equity transactions", said a Delhi and Mumbai stock exchange member broker Rajiv Malik.
The tax imposed was well above the market expectations and would squeeze the trading volumes by more than half in future, he said and added that the brokers were of the view that it might be around 0.05 per cent.
Leading BSE and NSE broker Manoj Choraria apprehended a serious fallout of the imposition of 0.15 per cent trading tax, saying it would deter investors from the market. The daily trading volume could fall to an average Rs 1,000 crore from Rs 3,000 crore, he said.
A Delhi-based market analyst and vice president of a leading broking firm said the Budget would give a negative impact on big bulls in the market as any transaction of Rs 1 crore would carry another Rs 15,000 as a turnover tax for the Government.
"This will push away the major players in derivatives, who provide depth and liquidity to the market and that might take down the volumes to one-third or more from the existing levels", he said.
{{/usCountry}}"This will push away the major players in derivatives, who provide depth and liquidity to the market and that might take down the volumes to one-third or more from the existing levels", he said.
{{/usCountry}}