Securities transaction tax (STT) is imposed by the exchange on the broker and is passed on to the customer. STT is levied on the total value of trades in equities, intraday, futures, options and also in case of mutual funds.

Sr. No.

Taxable securities transaction

Rate

Payable by

1

Purchase of an equity share in a company or a unit of an equity-oriented fund, where:

0.1 per cent

Purchaser

(a) the transaction of such purchase is entered into in a recognized stock exchange; and

(b) the contract for the purchase of such share or unit is settled by the actual delivery or transfer of such share

2

Sale of an equity share in a Company or a unit of an equity-oriented fund, where:

0.1 per cent

Seller

(a) the transaction of such sale is entered into in recognized stock exchange; and

(b) the contract for the sale of such share or unit is settled by the actual delivery or transfer of such share [or unit]

3

Sale of an equity share in a company or a unit of an equity oriented fund, where:

0.025 per cent

Seller

(a) the transaction of such sale is entered into in a recognized stock exchange; and

(b) the contract for the sale of such share or unit is settled otherwise than by the actual delivery or transfer of such share or unit

As you can see from the above table, the STT rates are much lower in the case of intraday transactions and only imposed on the sell side of the transaction. On the other hand, the STT on delivery trades is on both the buy and sell sides and it is at a higher rate. Also, in case of futures, the STT is levied on the notional value of the futures but in case of options it is only levied on the premium value of the options and not on the notional value.