INTERVIEW QUESTIONS TAX SECURITIES TRANSACTION TAX DETAILS

Question: What is the rate of Securities Transaction Tax (STT) on various Securities?

Answer: The table below depicts the rate at which various securities are taxed. The rate of taxation for STT is set by the government and depends upon the type of security and also on the fact that the transaction is sale or purchase. Apart from all the advantages that STT offers with respect to transparent and timely payment of tax on trading instruments, STT also ensures that inflow of speculative cash in reduced in any market.

S.No.


Taxable Securities Transaction


Rate of taxation


Payable By

1


Sale of an option in securities


0.017 per cent


Seller

2


Sale of an option in securities, where option is exercised


0.125 per cent


Purchaser

3


Sale of a futures in securities


0.01 per cent


Seller

This table can further be refined to include details about the type of securities and then list down the corresponding rates of taxation. This is explained in the table below.

S.No.


Type of Taxable Securities


Type of Transaction


Applicable STT

1


Delivery-based equity shares


Purchase


0.125% on total value

2


Equity oriented mutual funds


Redemption of units


0.25%

3


Equity shares, equity mutual fund units and intra-day traded shares


Purchase


Nil

4


Derivative- sale of option


Sale


0.017%

5


Derivative sale of futures


Sale


0.017%

The table below depicts the rate at which various securities are taxed. The rate of taxation for STT is set by the government and depends upon the type of security and also on the fact that the transaction is sale or purchase. Apart from all the advantages that STT offers with respect to transparent and timely payment of tax on trading instruments, STT also ensures that inflow of speculative cash in reduced in any market.

S.No.


Taxable Securities Transaction


Rate of taxation


Payable By

1


Sale of an option in securities


0.017 per cent


Seller

2


Sale of an option in securities, where option is exercised


0.125 per cent


Purchaser

3


Sale of a futures in securities


0.01 per cent


Seller

This table can further be refined to include details about the type of securities and then list down the corresponding rates of taxation. This is explained in the table below.

S.No.


Type of Taxable Securities


Type of Transaction


Applicable STT

1


Delivery-based equity shares


Purchase


0.125% on total value

2


Equity oriented mutual funds


Redemption of units


0.25%

3


Equity shares, equity mutual fund units and intra-day traded shares


Purchase


Nil

4


Derivative- sale of option


Sale


0.017%

5


Derivative sale of futures


Sale


0.017% Source: CoolInterview.com

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