‘Sleeping partner can’t answer sitting…’: FM Sitharaman’s Reply To Stock Broker On Multiple Tax Concerns
Union finance minister Nirmala Sitharaman (Image: News18/File)
Union Finance Minister Nirmala Sitharaman gave a cryptic responses to concerns about high taxes on stock market brokers
Are investors and brokers paying too much taxes in India? At a recent event in Mumbai attended by Union Finance Minister Nirmala Sitharaman, a broker questioned the fairness of the tax burden on investors and brokers in India.
He said while investors are putting their money at risk, it is the government that is reaping returns. The broker called the government of India a sleeping partner, drawing a smile from the finance minister.
“When we are putting a trade for a retail investor, you are attracting a number of taxes- GST, IGST, stamp duty, STT, and long-term capital gains tax… so today the government of India is earning more than the broker,” the broker said at the “Vision for Indian Finance Markets” event at BSE in Mumbai.
He said investors and brokers are risking everything, including money and staff costs. “I am taking a whole lot of risk, and the government of India is taking away all of the profit… you are my sleeping partner, and I am the working partner.”
The Government of India is my sleeping partner.FM Nirmala Sitharaman Stumped By This Question At BSE by stock market investor. pic.twitter.com/tr7yD9yQdg— Pankaj Parekh (@DhanValue) May 16, 2024
Sitharaman responded to the broker’s characterisation, saying, “A sleeping partner cannot answer sitting here,” drawing laughter from the audience.
The broker also highlighted the challenges of buying a home in Mumbai and how taxes make it worse. “Today, we can’t make payments in cash… so if I am buying a house, I will have to pay by cheque. My bank balance is purely after paying all the taxes to the government of India. But when I am buying a house, I have to pay 11 percent GST in Mumbai. So how will you assist a small person with limited resources and brokers who have to pay a hoard of taxes to the government?” the broker asked the minister.
Addressing broader concerns, Sitharaman also appealed to decision-makers at stock exchanges NSE and BSE during the event to work closely with the regulator, the Securities and Exchange Board of India, to create stringent regulatory standards.
Any unchecked explosion in retail trading of futures and options, she warned, could create future challenges not just for markets, but for investor sentiment and household finances.
