Why is it in the news?
→ Finance Minister proposed an up to 150% increase in STT on futures and options.
→ Revision announced to adjust taxation on derivatives trading.
Category
Economy
Important Points
- STT is direct tax on purchase and sale of listed securities.
- Levied and collected by the Central Government.
- Charged on transaction value irrespective of profit or loss.
- Deducted at source at time of transaction like TDS.
- Introduced through Finance Act, 2004.
- Governed by Securities Transaction Tax Act.
- Rates vary by security type.
- Applicable to equities, derivatives and equity mutual fund units.
- Not applicable to off-market, commodity or currency transactions.
- Includes unlisted shares sold under IPO offer for sale.
- Futures and options are derivative contracts at predetermined price/date.