Is it true that Securities Transaction Tax (STT) collections have shot up this year?

As of first 10 months of FY22, the STT collections for FY22 stood at Rs.19,200 crore, a record of sorts. In FY21, STT collections got close to $2 billion for the first time. However, in just one year i.e., in FY22, STT collections are expected to cross $3 billion. The reason is big retail participation. With over 8 crore demat accounts, over 10 crore trading accounts and over 5 crore MF SIPs, retail participation in equity markets is driving the surge in STT collections.

Look at the numbers. For FY22, the budget estimate was Rs.12,000 crore which was later revised to Rs.20,000 crore. With Rs.19,200 crore collected via STT in 10 months, it looks like STT collections of Rs.23,000 crore in FY22 is on the cards. This time around, the biggest boost is visible in the equity volumes; largely from retail investors, and not for index or stock options. That is why the STT collections are being driven up so sharply.