Full formBanking & Finance
STTstands forSecurities Transaction Tax
Full Form of STT
What is STT?
Securities Transaction Tax, commonly referred to as STT, is a direct tax levied by the Government of India on the purchase and sale of securities listed on recognised stock exchanges across the country. Introduced in the Union Budget of 2004 by the then Finance Minister P. Chidambaram, STT came into effect from October 1, 2004, with the primary objective of curbing rampant tax evasion and speculative trading that was affecting the integrity of Indian capital markets. The tax is collected at the source by stock exchanges such as the NSE and BSE, and then remitted to the Central Government. STT applies to a wide range of financial instruments including equity shares, derivatives, units of equity-oriented mutual funds, and other notified securities. The applicable rate of STT varies depending on the nature of the transaction, with different slabs for delivery-based equity trades, intraday squaring off, futures, and options contracts. For traders, investors, and tax professionals, understanding STT is essential because it directly affects the net cost of trading and plays a role in computing capital gains liability. This concept is frequently tested in banking, finance, and UPSC examinations.
STT का फुल फॉर्म
प्रतिभूति लेनदेन कर
Example
Rohit noticed an additional STT charge of ₹175 debited from his trading account after he squared off his intraday position on Nifty futures through his broker.
STT — frequently asked questions
What is the full form of STT?
STT stands for Securities Transaction Tax, a direct tax levied by the Government of India on transactions involving listed securities on recognised stock exchanges.
When was STT introduced in India and why?
STT was introduced on October 1, 2004, through the Union Budget of 2004, primarily to curb tax evasion, prevent speculative trading, and bring greater transparency to the Indian capital markets.
Who is responsible for collecting and depositing STT?
STT is collected at source by recognised stock exchanges such as NSE and BSE on behalf of the Central Government, and the exchanges remit the collected amount to the government treasury.