{"id":6547,"date":"2026-02-02T11:18:07","date_gmt":"2026-02-02T05:48:07","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=6547"},"modified":"2026-02-02T16:52:27","modified_gmt":"2026-02-02T11:22:27","slug":"what-is-securities-transaction-tax-stt","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-securities-transaction-tax-stt\/","title":{"rendered":"Securities Transaction Tax (STT)"},"content":{"rendered":"<h2><b>Securities Transaction Tax (STT) Latest News<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The Finance Minister recently proposed to raise the Securities Transaction Tax (STT) on both futures and options by up to 150%.<\/span><\/p>\n<h2><b>About Securities Transaction Tax (STT)<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is a <\/span><b>direct tax<\/b><span style=\"font-weight: 400;\"> levied on the <\/span><b>purchase and sale of securities listed on recognised stock exchanges<\/b><span style=\"font-weight: 400;\"> in India.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is <\/span><b>levied and collected by the central government<\/b><span style=\"font-weight: 400;\"> of India.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It is applied<\/span><b> irrespective of the profit or loss made <\/b><span style=\"font-weight: 400;\">by you in the transaction. It is<\/span><b> levied directly on the value of the transaction.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">STT operates similarly to Tax Deducted at Source (TDS) in that it is <\/span><b>deducted at the time of the transaction itself.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The tax is <\/span><b>paid directly to the government through<\/b><span style=\"font-weight: 400;\"> the <\/span><b>stock exchanges or other intermediaries<\/b><span style=\"font-weight: 400;\"> involved in the transaction.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><b>Introduced through the Finance Act of 2004,<\/b><span style=\"font-weight: 400;\"> STT was designed <\/span><b>to simplify taxation on securities trading<\/b><span style=\"font-weight: 400;\"> and <\/span><b>curb tax evasion<\/b><span style=\"font-weight: 400;\"> in the capital market.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">STT is<\/span><b> governed by the <a href=\"https:\/\/vajiramandravi.com\/current-affairs\/securities-transaction-tax\/\" target=\"_blank\">Securities Transaction Tax<\/a> Act (STT Act), <\/b><span style=\"font-weight: 400;\">and STT Act has specifically <\/span><b>listed various taxable securities transaction<\/b><span style=\"font-weight: 400;\">s, i.e., transactions on which STT is leviable.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Taxable securities<\/span><b> include equities, derivatives, or equity-oriented mutual funds <\/b><span style=\"font-weight: 400;\">investment units (excluding commodities and currency).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">It also includes u<\/span><b>nlisted shares sold under an offer for sale to the public included in IPO<\/b><span style=\"font-weight: 400;\"> and where such shares are <\/span><b>subsequently listed in stock exchanges.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">STT is <\/span><b>not applicable to off-market transactions <\/b><span style=\"font-weight: 400;\">or to <\/span><b>commodity or currency transactions.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>rate of taxation <\/b><span style=\"font-weight: 400;\">is <\/span><b>different for different types of securities.<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>government <\/b><span style=\"font-weight: 400;\">has the authority to <\/span><b>revise STT rates periodically.\u00a0<\/b><\/li>\n<\/ul>\n<h2><b>What is Futures and Options Trading?<\/b><\/h2>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Futures and options are the<\/span><b> major types of stock derivatives trading<\/b><span style=\"font-weight: 400;\"> in a share market.\u00a0<\/span>\n<ul>\n<li style=\"text-align: justify;\"><b>Derivatives <\/b><span style=\"font-weight: 400;\">are <\/span><b>financial contracts <\/b><span style=\"font-weight: 400;\">whose <\/span><b>value is linked to the value of an underlying asset<\/b><span style=\"font-weight: 400;\"> such as shares, stock market indices, commodities, ETFs, and more..\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">They are complex financial instruments that are <\/span><b>used for<\/b><span style=\"font-weight: 400;\"> various purposes, including s<\/span><b>peculation, hedging a<\/b><span style=\"font-weight: 400;\">nd getting access to additional assets or markets.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><b>Futures and Options<\/b><span style=\"font-weight: 400;\"> are<\/span><b> contracts signed by two parties for trading a stock<\/b><span style=\"font-weight: 400;\"> asset at a <\/span><b>predetermined price at a later date.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Futures and Options trading are <\/span><b>different in terms of obligations imposed on individuals.\u00a0<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>Futures<\/b><span style=\"font-weight: 400;\"> contracts <\/span><b>obligate the buyer to purchase an underlying asset, <\/b><span style=\"font-weight: 400;\">while the <\/span><b>seller must deliver it at a predetermined price and date.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><b>In options<\/b><span style=\"font-weight: 400;\"> contracts, the <\/span><b>buyer has the right, but not the obligation, to buy or sell <\/b><span style=\"font-weight: 400;\">the underlying asset at a predetermined price and date, while the<\/span><b> seller must honour the contract if the buyer chooses to exercise their option.<\/b><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Source: <\/b><strong><a href=\"https:\/\/www.cnbctv18.com\/market\/budget-2026-securities-transaction-tax-stt-rasied-futures-options-fm-nirmala-sitharaman-impact-19838207.htm\" target=\"_blank\" rel=\"nofollow noopener\">CNBC<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Securities Transaction Tax (STT) is a direct tax levied on the purchase and sale of securities listed on recognised stock exchanges in India. Read more about Securities Transaction Tax (STT), Features, Latest News<\/p>\n","protected":false},"author":5,"featured_media":85518,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[21,3106,22,23],"class_list":{"0":"post-6547","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-prelims-pointers","9":"tag-securities-transaction-tax","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/6547","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=6547"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/6547\/revisions"}],"predecessor-version":[{"id":85597,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/6547\/revisions\/85597"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/85518"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=6547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=6547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=6547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}