Published Article Details

5 smart things to know about securities transaction tax

Posted by: Labdhi Mehta on Jul 03, 2017, 06.30 AM IST

1. STT is a type of direct tax payable on the value of taxable securities transaction done through a recognized stock exchange in the country.

2. The securities on which STT is applicable are shares, bonds, debentures, derivatives, units issued by any collective investment scheme, equity based government rights or interests in securities and equity mutual funds.

3. Off-market share transactions are not covered under STT.

4. The rate of taxation for STT is set by the government and depends upon the type of security and type of transaction, whether purchase or sale.

5. For equity transactions that are delivery-based, STT for purchase and sale is 0.1% of turnover and for intra-day transactions, STT for purchase is nil and sale is 0.025% of the turnover.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.) This article appeared in Economic Times dated Jul 03, 2017, 06.30 AM IST