The securities transaction tax (STT) was introduced in India a few years ago, to stop tax avoidance of capital gains tax. Earlier, many people usually didn’t declare their profits on the sale of stocks and avoided paying capital gains tax. The government could tax only those profits, which have been declared by people.

**INCOME TAX STT** Hi, The securities transaction tax (STT) was introduced in India a few years ago, to stop tax avoidance of capital gains tax. Earlier, many people usually didn’t declare their profits on the sale of stocks and avoided paying capital gains tax. The government could tax only those profits, which have been declared by people. The Finance Ministry has supported the introduction of the STT to simplify the tax regime on financial market transactions. According to the ministry, STT is a clean and efficient way of collecting taxes from financial markets. In the words, STT is a neat, efficient and easy-to-administer tax and it has the great advantage of virtually eliminating tax avoidance. Thanks

Hello Rashmi > Security Transaction Tax (STT) Security Transaction Tax (STT) was introduced in the Indian capital market in 2004. It is a tax on transaction of equities as well as their derivatives. ------ The Main rationale behind STT was to replace the long-term capital gains tax and create a level playing field for all participants in the stock market. It was also seen as a way to mobilize additional revenue. The rate of taxation has been revised several times since it was imposed and currently stands at 0.1 per cent for both, buyers and sellers of cash deliverables. The overall impact of STT on the efficiency of stock markets is determined by its effect on volume, liquidity, asset prices and volatility.

Hie Rashmi, **SST is payable because :-** -Securities Transaction Tax (STT) is a tax payable in India on the value of securities (excluding commodities and currency) transacted through a recognized stock exchange. - The tax is not applicable on off-market transactions or on commodity or currency transactions. The original tax rate was set at 0.125% for a delivery-based equity transaction and 0.025% on an intra-day transaction. The rate was set at 0.017% on all Futures and Options transactions. STT was originally introduced in 2004 by the then Finance Minister, P. Chidambaram to stop tax avoidance of capital gains tax. - The government reduced this tax in the 2013 budget after a lot of protests for years by the brokers and the trading community. The revised STT for delivery-based equity trading is 0.1% on the turnover. For Futures, the tax has been reduced to 0.01% on the sell-side only. - The rest of the tax structure remains as is. [1]Securities transaction tax is a direct tax.Securities Transaction Tax is levied and collected by the union government of India.