Securities Transaction Tax (STT) returns are likely to come under increased scrutiny of the I-T department this fiscal. The department is also toying with the idea of including permanent account number (PAN) in STT returns.
At present, STT returns carry information about the tax deducted on transactions carried out by clients of each broker. But there is no mechanism to correlate client codes with the PAN of the individual investor or trader. The department wants to plug this information gap, sources told ET.
While STT returns data are useful to check the genuineness of transactions carried out by the investor or trader, authorities feel the need for a common link between client code issued by the broker and clients PAN.
Such a link would serve the dual purpose of verification of transactions as well as the credit claimed for securities transactions tax deducted on such transactions. STT returns are filed by stock exchanges and mutual funds.
Though the number of returns is limited, the data filed here are voluminous. Certificates in respect of STT deducted are issued by brokers. The I-T department thinks that to verify the STT certificates, a system needs to be evolved whereby claim of credit for STT can be cross-checked.
The scrutiny exercise will also help in identification of new areas, which require to be looked into for effective STT implementation.Total STT collection stood at Rs 1,490 crore during April-July 06-07, against Rs 557 crore during April-July 05-06.