{"id":8083,"date":"2025-05-30T15:49:50","date_gmt":"2025-05-30T10:19:50","guid":{"rendered":"https:\/\/www.torusdigital.com\/toruscope\/?p=8083"},"modified":"2025-08-08T15:03:16","modified_gmt":"2025-08-08T09:33:16","slug":"securities-transaction-tax-guide","status":"publish","type":"post","link":"https:\/\/www.torusdigital.com\/toruscope\/tax\/securities-transaction-tax-guide\/","title":{"rendered":"What Is Securities Transaction Tax (STT) and How Does It Work?"},"content":{"rendered":"

When you buy or sell shares in the stock market, you don\u2019t just pay for the shares. You also pay a small fee called the Securities Transaction Tax (STT). It\u2019s a government-imposed tax that applies every time you trade certain financial instruments like shares, <\/span>equity mutual funds<\/b>, or derivatives on recognised stock exchanges.\u00a0<\/span><\/p>\r\n

Many beginners ignore this cost because it feels small, but if you’re trading often or in large volumes, it can quietly reduce your profits. That\u2019s why it’s important to know how STT works and how it affects your returns. This blog will walk you through the basics of STT, like how it\u2019s charged, why it matters, and what it means for your investments, so you can make smarter trading decisions.<\/span><\/p>\r\n

<\/span>What Is Securities Transaction Tax (STT)?<\/b><\/span><\/h2>\r\n

Securities Transaction Tax<\/b> (STT) is a type of tax you pay when you buy or sell securities like shares, derivatives, or mutual fund units on a recognised stock exchange in India. It works somewhat like Tax Collected at Source (TCS) and is collected at the time of the transaction.<\/span><\/p>\r\n

STT is a direct tax and is governed by a special law called the <\/span>Securities Transaction Tax<\/b> Act (STT Act). This act clearly lists which transactions are taxable under STT and who is responsible for paying it.<\/span><\/p>\r\n

<\/span>What Kinds of Securities Are Taxed?<\/b><\/span><\/h3>\r\n

STT applies to many types of securities, such as:<\/span><\/p>\r\n