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Rule 6DDA of Income Tax Rules 1962: Fulfill the conditions to be recognised stock exchange - Section 43(5)

Rule 6DDA - Conditions that a stock exchange is required to fulfill to be notified as a recognised stock exchange for the purposes of clause (d) of proviso to clause (5) of section 43

For the purposes of clause (d) of proviso to clause (5) of section 43, a stock exchange shall fulfill the following conditions in respect of trading in derivatives, namely :—

(i) the stock exchange shall have the approval of the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 (15 of 1992) in respect of trading in derivatives and shall function in accordance with the guidelines or conditions laid down by the Securities and Exchange Board of India;

(ii) the stock exchange shall ensure that the particulars of the client (including unique client identity number and PAN) are duly recorded and stored in its databases;

(iii) the stock exchange shall maintain a complete audit trail of all transactions (in respect of cash and derivative market) for a period of seven years on its system;

(iv) the stock exchange shall ensure that transactions (in respect of cash and derivative market) once registered in the system are not erased;


(v) the stock exchange shall ensure that the transactions (in respect of cash and derivative market) once registered in the system are modified only in cases of genuine error and maintain data regarding all transactions (in respect of cash and derivative market) registered in the system which have been modified and submit a monthly statement in Form No. 3BB to the Director General of Income-tax (Intelligence), New Delhi within fifteen days from the last day of each month to which such statement relates.



Extra Notes for Readers:

- Rule 6DDA was introduced by the Income Tax (Twentieth Amendment) Rules, 2005, w.e.f. 01-07-2005



Reference/Source: Check at Income Tax site for latest version of the Rules - link

This page was last updated on 17th October 2016.
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