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I'm stuck! Indian Broker Refuses Withdrawal Due to Unpaid STCG Tax.

T S Khurana

T S Khurana   |353 Answers  |Ask -

Tax Expert - Answered on Jan 17, 2025

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more
Asked by Anonymous - Jan 02, 2025Hindi
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Sir, Me and my sisters had invested lot of money in am indian discount broker. We accumulated some profit stored in trading account. But in the beginning of January 2025, when my sisters wanted to withdraw amount, the stock broker says my sisters have to pay STCG tax amount, before they can withdraw the amount. He has calculated the tax at 30% rate. This stock broker gives instructions for index trading, basically on spot precious metals(THGSE) since couple of weeks Can he withheld investors money from withdrawing on the basis of non-payment of STCG tax.

Ans: 01. Income of STCG is taxed in the year, in which it is earned. So accumulated Profit should not be for a longer duration. It has to be taxed in your hand, as & when, you file your ITR.
02. Tax rate of STCG is not more than 20% in any case. However, it could also be slab rate in many cases. Your question does not provide details to confirm the same.
03. Your stock broker is not supposed to give you instructions, instead should advice you. You are not obliged to act on his advice & you are free to take your own decisions. He cannot withhold your payment in normal circumstances.
Most welcome for any further clarifications. Thanks.
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