What is the Full Form of STT in the Share Market?

The STT’s Full Form in the Share Market is Securities Transaction Tax. This is a financial transaction tax which is similar to the tax collected at source. This refers to the direct taxes that are levied on the sale and purchase of securities at the stock exchanges. The taxable securities include the derivatives, equity, and the equity oriented mutual fund.

Features of Securities Transaction Tax:

The STT is a direct tax that is simple to calculate and impose. It is generally applied on all the sell transactions for both the futures and the options. The tax is applicable on shares, derivatives, bonds, debentures, and Government securities. The clearing member pays the tax in total for all the trading members under him.

When is the STT levied?

STT is applicable every time purchase and the sale of equity are listed on the stock market. The tax is applicable the moment a transaction occurs in the share market and is charged instantly. It is applicable to all the transactions of the stock market and is not avoidable. Investors can get an STT certificate at the end of the financial year, and this can be very useful when claiming a deduction from Short-Term Capital Gains.