The Securities Transaction Tax (STT) is a type of ‘financial transaction tax’ levied in India on transactions done on the domestic stock exchanges.
Rates of STT are prescribed by the central government.
It is a direct tax.
In India, STT is collected for the GoI by the stock exchanges.
Till date, STT is not applicable in case of preference shares, government securities, bonds, debentures, currency derivatives, units of mutual fund other than equity oriented mutual fund, and gold exchange traded funds and in such cases, tax treatment of short-term and long-gains shall be as per normal provisions of law.
Transactions of the shares of listed companies on the floor of the stock exchange, takeover, buyback, delisting offers, etc., also does not come under STT framework.
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