InvestorQ : What is Securities Transaction Tax (STT)?
shivani Walawalkar made post

What is Securities Transaction Tax (STT)?

Pratik vyas answered.
2 years ago

When an investor transacts in listed shares, he will have to pay a turnover tax on sale and purchase of shares. This tax is called STT and it is governed by the STT Act. Securities on which STT is levied are equity, derivatives and equity oriented mutual funds. STT is also levied on unlisted shares that are sold to retail investors through offer for sale and subsequently when they get listed on stock exchanges.

STT was replaced by long-term capital gain (LTCG) tax in Budget 2004-05. However, in Budget 2017-18, long-term capital gain tax was further introduced along with STT making transactions costlier for investors. STT rate is decided by the government and it can vary from time to time.