INTERVIEW QUESTIONS TAX SECURITIES TRANSACTION TAX DETAILS

Question: When is Securities Transaction Tax levied?

Answer: Securities transaction tax is levied on each purchase and sale of equity listed on a domestic and recognized stock market. The rate of taxation is determined by the government. All stock market transactions that involve equity or equity derivatives like futures and options are liable to be taxed under the STT act. STT is charged as soon as a share transaction is completed. This makes STT fast, transparent and effective. Since the tax is levied as soon as the transaction arises, instances of non-payment, wrong payment etc. are reduced to minimum. The net result of this however, is that it pushes up the cost of the transactions.

Securities transaction tax is levied on each purchase and sale of equity listed on a domestic and recognized stock market. The rate of taxation is determined by the government. All stock market transactions that involve equity or equity derivatives like futures and options are liable to be taxed under the STT act. STT is charged as soon as a share transaction is completed. This makes STT fast, transparent and effective. Since the tax is levied as soon as the transaction arises, instances of non-payment, wrong payment etc. are reduced to minimum. The net result of this however, is that it pushes up the cost of the transactions. Source: CoolInterview.com

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