Saturday 11 February 2017

What is STT? All about Securities Transaction Tax

What is STT?

The securities Transaction Tax or STT was introduced in October 2004 . STT is tax on profit on transactions on specified securities in the stock exchange such as equity shares, derivatives or units of equity oriented mutual funds etc at a prescribed rate and is levied on the value of transaction. The tax is levied on both delivery and non-delivery of transactions for purchase or sale of equity shares, equity oriented mutual funds at differential rates. The tax to be levied is determined by the Central Government and would vary with the kind of transaction.
Generally, people some time do not even realize that they have already paid the STT as it is added to the transaction price automatically.

Save your Tax by attaching STT certificate


There is a certificate of STT which can be collected from your broker. It can be collected at the end of the year to get the amount deducted from your short term capital to save tax. If your capital gain is for more than a year, you will need to pay Capital Gains Tax. If it is for less than a year, then the STT will be adjusted to the tax that is payable.

How is STT rates calculated?

The rate of STT varies according to the type of security and type of transaction.
  • Purchase/Sale of equity shares, units of equity oriented mutual fund-0.125%
  • Sale of equity shares, units of equity oriented mutual fund (non –delivery based)-0.025%
  • Sale of an option in securities-0.017%
  • Sale of an option in securities, where option is exercised-0.125%
  • Sale of a futures in securities-0.017%
  • Sale of unit of an equity oriented fund to the Mutual Fund-0.25%
Please check NSE website for updated STT rates

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