Securities Transaction Tax (STT)

STT is a direct tax levied on every purchase and sale of securities that are listed on the recognized stock exchanges in India. STT is governed by Securities Transaction Tax Act (STT Act) and STT Act has specifically listed down various taxable securities transactions i.e., transactions on which STT is leviable. STT is charged in respect of the taxable securities transaction as mentioned in Section 98 of Securities Transaction Tax Act.

As per Section 100 of Securities Transaction Tax Act,

• Every recognised stock exchange shall collect the securities transaction tax from every person, being a purchaser or a seller, as the case may be, who enters into a taxable securities transaction in that stock exchange, at the rates specified in section 98.
• The prescribed person in the case of every Mutual Fund shall collect the securities transaction tax from every person who sells a unit to that Mutual Fund, at the rate specified in section 98.
• The lead merchant banker appointed by the company in respect of an IPO shall collect the securities transaction tax from every person who enters into taxable securities transaction referred to in sub-clause (aa) of clause (13) of section 97 at the rate specified in section 98.

Every recognised stock exchange or by the prescribed person in the case of every Mutual Fund [or the lead merchant banker in the case of an initial public offer shall deposit the STT by the 7th day of the month immediately following the calendar month in which it is collected. An interest @1% p.m. will be levied on delayed payment of STT.

Rule 7 of Securities Transaction Tax Rules prescribes that The return of taxable securities transactions required to be furnished under sub-section (1) of section 101 of the Act shall,—

1. in the case of a recognised stock exchange, be in Form No. 1 and be verified in the manner indicated therein;
2. in the case of a Mutual Fund, be in Form No. 2 and be verified in the manner indicated therein.

The return of taxable securities transaction entered into during a financial year shall be furnished on or before the 30th June immediately following that financial year.

Steps for payment of Securities Transaction Tax:

1. Click on link https://www.tin-nsdl.com/services/oltas/e-pay.html
2. Click on Click to pay tax online on the right side of the webpage
3. Click on Proceed button under tab CHALLAN NO./ITNS 282
4. Select Tax Applicable o (0034) Securities Transaction Tax& scroll down Financial Year as applicable
5. Under type of payment select o (300) Self-Assessment tax
6. Under mode of payment o Net Banking & scroll down Bank Name
7. Mention Permanent Account No(PAN) of selling shareholder
8. Select Assessment year as applicable
9. Mention full address with city, state, pin code
10. Enter Captcha Code
11. Click on proceed to pay the tax