Budget 2023: STT collection estimate for FY24 raised 10% to Rs 27,625 crore

The government expects to collect Rs 27,625 crore from the securities transaction tax (STT) in FY24, which is 10.5 percent higher than the revised budget estimate of the preceding financial year.

The budget for FY23 projected collections of Rs 20,000 crore, which was revised to Rs 25,000 crore on February 1, 2023 - a jump of 25 percent. In FY22, the government collected Rs 23,191 crore.

Introduced in 2004, STT is levied on transactions involving various types of securities. All stock market transactions that involve equity or equity derivatives such as futures and options are liable under STT, as are mutual fund transactions.

The rate presently varies from 0.025 percent to 0.125 percent, depending on the type of security traded and the transaction – whether it is a sale or purchase, according to information on the National Stock Exchange website.

The government expects higher-than-estimated tax collections as the participation of new investors continues to be impressive in both the cash and derivative segments of the stock exchanges.