Despite market slump, STT collection up 5% on higher derivatives trade
The reason for the high STT collection is due to the high volume of transactions in futures and options from between April 2019 and January 2020.
March 23, 2020 / 01:55 PM IST
In FY20, the securities transaction tax (STT) collection is up 5 percent year-on-year (YoY) at Rs 11,247 crore as of March 15, according to a Business Standard report.
The Income Tax Department is hoping that they will be able to cross the FY20 target of Rs 12,500 crore, the report said.
The reason for the high STT collection is due to the high volume of transactions in futures and options (F&O) from between April 2019 and January 2020, the Business Standard reported.
STT collections usually dip when markets are going through a slump. But, the activity seen in the F&O segment helped keep the tax payouts stable.
Benchmark Indian indices have been extremely weak since February, largely owing to fears of the impact of the coronavirus outbreak.
Equity derivatives turnover have increased 43 percent so far in FY20, the report added. Overall market turnover in both cash and derivatives segments have gone up 39 percent.
The collection of dividend distribution tax (DDT) has risen 2 percent, owing to changes in tax structure from April 1.
As of March 15, the DDT collection in FY20 is Rs 51,873 crore, the report said.