What is STT?

What is Securities Transaction Tax (STT)?

Securities Transaction Tax (STT) is a tax levied on transactions conducted on stock exchanges, including the trading of shares, derivatives, and equity-oriented mutual funds.

Key Points:

• Scope: Applies to equity and equity derivative transactions.

• Rates: Vary based on the transaction type (e.g., delivery-based, intraday, futures).

• Deductibility: STT paid can be deducted while computing capital gains tax.

• Collection: Automatically deducted by brokers at the time of the transaction.

STT promotes transparency and ensures tax compliance in the securities market. It simplifies the tax payment process for investors and provides a steady revenue stream for the government.