Securities Transaction Tax (ST

Securities Transaction Tax (STT) is a direct tax levied on the transaction value of every purchase and sale of securities (shares, derivatives, etc.) on recognized Indian stock exchanges to curb tax evasion on capital gains. It was introduced in 2004 to ensure efficient tax collection and is directly collected at the time of transaction.   The STT rates on various transactions include: ·        Equity shares (delivery based; buy or sell)  - 0.1% ·        Intraday or non-delivery sale of equity shares – 0.025% ·        Futures – 0.05% (increased from 0.02% in Budget 2026-27) ·        Sell options (option premium) – 0.15% ( increased from 0.10% in Budget 2026-27) ·        Options exercised – 0.15% ( increased from 0.125% in Budget 2026-27)   The Union Budget 2026-27 increased STT rates on Futures & Options (F&O) to curb excessive speculations as these changes make Futures & Options trading more expensive.