Securities Transaction Tax

Concept:  Securities Transaction Tax
Topic: Economy
Category: Government Budgeting
Related News: Hindu, Mar 1
CNA mentions: 1(Mar 1)                                                                

Securities Transaction Tax

Securities Transaction Tax (STT) is a type of turnover tax where the investor is obliged to pay a tax on the total sum received or paid in a transaction done through an exchange. STT is not applicable for commodities and currency transactions and on transactions outside of the exchange. It is applicable to securities like shares, debentures, bonds, mutual funds, government equity securities, derivatives, etc. The STT rates are different for delivery-based equity transactions and intra-day transactions. The rates are also different when buying a security and when selling one. It was announced in 2004 by the then finance minister P Chidambaram with a view to decrease evasion of capital gains tax.