transaction security

Securities Transaction Tax (STT) is a tax payable in India on the value of securities (excluding commodities and currency) transacted through a recognized stock exchange. As of 2016, it is 0.1% for delivery based equity trading.STT does not apply to off-market transactions or on commodity or currency transactions. The original tax rate was set at 0.125% for a delivery-based equity transaction and 0.025% on an intra-day transaction. The rate was set at 0.017% on all Futures and Options transactions.
STT was originally introduced in 2004 by the then Finance Minister, P. Chidambaram to stop tax avoidance of capital gains tax. The government reduced this tax in the 2013 budget after protests for years by the brokers and the trading community. The revised STT for delivery-based equity trading is 0.1% on the turnover. For Futures, the tax has been reduced to 0.01% on the sell-side only. For Equity Options, the STT has been reduced to 0.05% on the sell side of the ρrémíùm amount. The rest of the tax structure remains as is. STT is a direct tax.The Government announced on 24 March 2023, that STT will increase by 25% effective 01 April 2023. STT on Futures (sell side) will be 0.0125% from the current 0.01% and STT on Options(Sell side) will be 0.0625% from 0.05%.The STT is levied and collected by the union government of India.
STT can be ρáíd by the seller or the purchaser depending on the transaction. The Securities Contract (Regulation) Act, 1956 defines Securities the transaction of which are taxable under STT.

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