Securities Transaction Tax, What is STT, Rates of STT & Calculation

Securities Deal Tax, What is STT, Rates of STT & Computation of SST, Just recently Changes, Computation of STT What do you indicate by STT? What are the widespread STT rates in India. Examine Rates of Security Transaction Tax. If you are a stock exchange financier, you would understand that your deals are taxed to STT, however do you know what it is? This short article will sum up whatever related to STT. Rates of Security Transaction Tax. Now check more information about Securities Deal Tax, What is STT, Rates of STT from listed below …

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What is STT? (Securities Transaction Tax)

STT refers to Securities Deal Tax which is levied on the securities deals (sale and purchase), which are carried out on stock market. This tax was introduced by the Spending plan 2004 and is applicable because. Securities transactions consist of usual equity shares and derivative products (futures deal and choices deal). STT will not be relevant on off market or OTC (Over The Counter) deals. This tax was introduced to tax the securities transactions at source and to ensure that the tax evasion will be reduced to a large degree.

Securities Transaction Tax

Recent announcements and amendments

  • Budget 2012 revised the STT rates as applicable as per Budget 2004 (when STT was presented). It modified STT rates for equity shares deals (both on buying and selling transactions), which were dealt for the delivery of such shares.
  • This year again, Spending plan 2016 has modified the STT rate for a particular classification (alternatives deals).

    Rates of STT

    Dominating STT rates

    Instrument and type of transaction STT rate
    Equity shares– if opted for delivery (both purchase and sale) 0.10%
    Equity shares– if traded exact same day (Intraday) and no delivery (relevant just for sale and no STT for purchase) 0.025%
    Futures deals– suitable to just sale (nil STT for buying) 0.010%
    Options deals– purchase deals (STT would be applicable on the settlement cost and just if it is exercised) 0.125%
    Options transactions– sale deals (STT would apply on the premium payable) 0.125%

    How STT is determined?

    On turnover

    The STT will be computed on the overall turnover of the sale or purchase transactions (other than for options deals). For e.g. if Mr. A purchased 100 equity shares of Rs. 10, then STT will be determined as listed below (in case he selects shipment).

    STT = 100 x 10 x 0.10% = Re. 1

    In such case, the purchaser will pay Rs.1001 for squaring off the purchase deal for delivery.

    Options transactions

    With an amendment advanced by the Budget 2016, STT on purchase and sale deals for alternatives is exact same @ 0.125%. It varies in the method it is levied. For purchase transactions, it is levied on settlement price which is exercised and for sale deals, it is imposed on premium.


    STT is much like a tax which is gathered at the time of materializing an occasion (in this case sale or purchase of securities). It adds up to your purchase price and is subtracted from your list price. Hence, this may be essential, if you are dealing in little parts of shares or small amount of transactions.

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