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SEBI Alerts Investors to Fake STT Notices and Account Handling Scams

The Securities and Exchange Board of India has warned investors about fraudulent notices misusing its letterhead to demand payment of Securities Transaction Tax. SEBI clarified it never sends such notices, as STT is automatically collected by brokers during trades. The regulator also highlighted a rise in scams involving unregistered individuals offering "account handling" services with promises of guaranteed profits. Both SEBI and the National Stock Exchange have urged investors to remain vigilant and not share account details.

Key Points: SEBI Warns of Fake STT Payment Notices and Investment Scams

  • Fake notices misuse SEBI letterhead
  • Scammers impersonate SEBI officials
  • STT is auto-collected by brokers
  • Beware of unregistered "account handlers"
  • NSE also issued similar warning
2 min read

SEBI warns investors against fake STT payment notices and account handling scams

SEBI warns investors against fake notices demanding STT payments and fraudulent "account handling" services promising guaranteed profits.

"SEBI never sends notices to investors asking them to pay STT. - Securities and Exchange Board of India"

Mumbai, Feb 26

The Securities and Exchange Board of India on Thursday warned investors to stay alert after reports of fake notices demanding payment of securities transaction tax.

In a statement, Securities and Exchange Board of India said that some fraudsters are misusing its letterhead to send false notices to investors.

These notices claim that investors have pending STT dues under the Finance Act, 2004, and wrongly state that Sebi is using powers under the Sebi Act, 1992, to collect the money.

The regulator clarified that it never sends notices to investors asking them to pay STT.

It also said that it does not work with the Reserve Bank of India for collecting such taxes. SEBI explained that STT is automatically charged on every buy and sell transaction done on stock exchanges and is collected directly by brokers at the time of the trade.

SEBI also pointed out that scammers are impersonating its officials by using their names, job titles, and fake email IDs that closely resemble official Sebi email addresses.

These tactics are being used to make the fraud look genuine and mislead investors into sending money.

Earlier this week, the National Stock Exchange issued a similar warning.

The exchange said it had noticed fake communications using Sebi's letterhead to demand STT payments. The NSE urged investors to remain cautious and not respond to messages that claim to be from Sebi officials and ask for money on the regulator's behalf.

Separately, SEBI also raised concerns about a rising number of scams related to so-called "account handling" services. In these cases, individuals pretend to be trading experts, portfolio managers, or fund managers and promise guaranteed or risk-free profits.

SEBI warned investors not to believe such claims and advised them never to share their trading account details with anyone.

The regulator stressed that these account handlers are not registered with Sebi and are not authorised to provide any investment or portfolio management services.

- IANS

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Reader Comments

S
Sarah B
As someone who recently started investing in Indian markets, this is terrifying. The scammers are getting so sophisticated. How are we supposed to know what's real? SEBI should run more public awareness campaigns on TV and social media.
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Rohit P
The "account handling" scam is even bigger. So many YouTube "gurus" promise 5% daily returns and people blindly give them their credentials. There's no such thing as risk-free profit in the market. Do your own research or use a SEBI-registered advisor only.
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Priyanka N
Good that SEBI is speaking up. But respectfully, they also need to be more proactive in tracking and shutting down these fake email IDs and websites. Just a warning isn't enough when people are losing their hard-earned savings.
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Aman W
Basic rule: No government body will ever call or email you first for tax payment without prior official notice. STT is deducted at source. If you get a call, just ask for their employee ID and say you'll verify at the local office. They'll disconnect immediately!
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Kriti O
Share this article with your parents and relatives! The older generation is most vulnerable to these scams. They trust official-looking letters. We need to educate them that SEBI, RBI, or Income Tax won't ask for urgent payments via phone or email.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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