Moneycontrol Bureau
The Finance Minister - Pranab Mukherjee in the Union Budget 2012-13 reduced the Securities Transaction Tax (STT) by 20% on delivery transactions from 0.125% to 0.10%. This means, traders have to now pay Rs 10,000 both on sale and buy sides for every Rs 1 crore of share transaction in the delivery segment.
STT was introduced in India in 2004-05 in a bid to stem the tax avoidance of capital gains tax. The government can only tax those gains, which have been declared by people. A lot of people simply do not declare their profits and avoid paying any capital gains tax. The then FM P Chidambaram introduced it. STT is payable whether you buy or sell a share and gets added to the price during the transaction itself.
The move is expected to bring some cheers in the investors community.
Existing structure of STT:
| Segments | Rate for every Rs 1 crore |
| Future and Options | Rs 1,733 on sale side |
| ***Capital Market -Delivery | Rs 12,500 both on sale and buy sides |
Capital Market
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