MUMBAI: Share brokers may have to deduct 10% tax at source on transaction charges that they pay to stock exchanges for online trading, according to a court order. The move will have a bearing on thousands of brokers who will now have to pay TDS along with interest for delayed payment.
Transaction charge is a fee incurred on buying or selling shares, which a broker pays to stock exchanges for being the middleman in a share transaction.
The Bombay High Court said stock exchanges give managerial services and transactions charges are the fee for “technical services” and liable to be taxed.
Source: http://articles.economictimes.indiatimes.com/2011-11-07/news/30369554_1_transaction-charges-online-trading-levy-tax
