Few days back a news created a hope in the heart of people transacted in the stock market. Security and Exchange board of India (SEBI) chairman requested the ministry of finance to either reduce or remove the security transaction tax (STT). It was proposed to boost the transactions in the stock market which directly get impacted due to STT.
Securities Transaction Tax (STT) is a tax deduction which is levied by the central government on all the equity transactions.
Also Read : What Is Security Transaction Tax (STT)?
The hope to get rid of the STT has vanished with the statement that central government has no such plans to reduce or remove security transaction tax.
Securities Transactions Tax (or STT) which was introduced by Finance Minister P Chidambaram in the year 2006 is proving to be an impeding factor to the transactions in Indian stock markets both by Indian as well as foreign investors. Currently, the rate varies from 0.0025% to 0.25% depending upon the type of security traded and transaction i.e. whether sale or purchase.