In this video, we discuss the recent government decision to impose a TDS (duty Deducted at Source) of up to 30% on earnings from Futures and Options (F&O) trading and its significant implications for traders.
Imagine you make a profit of ₹1000 in F&O trading, and after accounting for brokerage charges and other costs, you’re left with ₹900. Under the new rule, 30% TDS is deducted from the ₹900, leaving you with just ₹630. Previously, traders paid revenue duty at the end of the financial year, but now the TDS is deducted directly from your profit before you even receive it.
This change raises several concerns. Many traders already struggle to make significant earnings, and this immediate deduction reduces their net earnings further. This might discourage small traders, potentially leading to a decrease in the number of active traders. A decline in traders could result in lower trading volumes on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), affecting their revenue.
While this decision falls under the money management Ministry, not the Securities and Exchange Board of India (SEBI), there’s a call for SEBI to location these trader concerns. The government might have implemented this rule due to the increasing number of retail traders entering the sector and to mitigate the financial losses they incur.
We believe the solution lies in better trader education on uncertainty management and making informed decisions. Adjusting lot sizes in F&O trading, shortening contract expiry periods, and implementing margin requirements for option buying could also help reduce risks.
Join us as we explore these issues in depth, discussing the potential impact on traders and the sector, and suggest ways forward that reflect the ground realities of trading. This video aims to provide clarity and advocate for measures that sustain trader participation while ensuring financial safety.
Stay tuned for a comprehensive discussion on the new TDS rule and its effects on F&O trading. Don’t forget to like, share, and subscribe for more insights on trading and financial regulations!
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