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“A sleeping partner cannot respond to a sitting situation.” —FM Sitharaman’s Response To Stock Broker Regarding Various Tax Concerns

Do brokers and investors in India pay excessive taxes? A broker recently questioned the fairness of the tax load on investors and brokers in India at an event in Mumbai that Union Finance Minister Nirmala Sitharaman attended.

He said that even though investors are risking their money, the government is benefiting. The finance minister smiled when the broker termed the Indian government a sleeping partner.

“You are subject to many taxes when we execute a deal for a retail investor, including the long-term capital gains tax, stamp duty, IGST, GST, and STT. Thus, the broker said at the BSE in Mumbai event “Vision for Indian Finance Markets” that the government of India now makes more money than the broker.

According to him, brokers and investors run the danger of losing everything, including money and payroll. “I am assuming a great deal of risk, and the Indian government is keeping all of the earnings for themselves. I am the working partner, and you are my sleeping partner.

In response to the broker’s portrayal, Sitharaman said, “A sleeping partner cannot answer sitting here,” which caused the crowd to chuckle.

The realtor also emphasized how difficult it is to purchase a property in Mumbai and how taxes exacerbate the situation. “We are unable to accept cash payments today. I will thus need to pay with a check if I purchase a property. After I have paid all of my taxes to the Indian government, my bank balance is pristine. However, in Mumbai, I have to pay 11% GST when I purchase a home. The broker questioned the minister, “So how will you help a small person with limited resources and brokers who have to pay a hoard of taxes to the government?”

In response to more general worries, Sitharaman also urged attendees at the NSE and BSE stock exchanges to collaborate closely with the Securities and Exchange Board of India, the regulatory body, in order to establish strict guidelines.

She cautioned that unrestrained growth in retail futures and options trading might pose problems in the future for investor confidence and family finances, in addition to the markets.

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