Securities Transaction Tax

Securities Transaction Tax Computation

As per the Finance Act 2004, and modified by Finance Act 2023 (No. 8 of 2023) STT on the transactions executed on the Exchange shall be as under:

• Value of taxable securities transaction relating to an "option in securities" shall be the option premium, in case of sale of an option in securities.
• Value of taxable securities transaction relating to an "option in securities, where option is exercised" shall be the intrinsic value (being the difference between the settlement price and the strike price).

The following procedure is adopted by the Exchange in respect of the calculation and collection of STT:

• STT is applicable on all sell transactions for both futures and option contracts.
• For the purpose of STT, each futures trade is valued at the actual traded price and option trade is valued at premium. On this value, the STT rate as prescribed is applied to determine the STT liability. In case of final exercise of an option contract STT is levied on settlement price on the day of exercise if the option contract is in the money.
• STT payable by the clearing member is the sum total of STT payable by all trading members clearing under him. The trading member's liability is the aggregate STT liability of clients trading through him.

Information to members

A report is provided to the members at the end of each trading day. The report contains information on the total STT liability, trading member wise STT liability, client wise STT liability and also the detailed computations for determining the client wise STT liability.