What is STT (Securities Transaction Tax)?

STT, or Securities Transaction Tax, is a tax applicable for securities - Equity (Cash) and Futures and Options (F&O) trades and not on Commodity or Currency trades. 

Different STT rates are applicable for Equity (Cash) and Futures and Options (F&O) transactions. STT is levied on trades on the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and other recognized stock exchanges. For commodities, CTT (Commodities Transaction Tax) is levied.

1. Equity

a. For Equity Delivery trades, an STT of 0.1% is levied on both buy and sell sides. This is shown as ‘STT - DEL’ in the Contract Note 

b. For Equity Intraday trades (squared off within the same trading day), an STT of 0.025% is levied on the sell side only. This is shown as ‘STT - SQUP’ in the Contract Note. 

Example:

A trader buys 500 shares of XYZ at ₹800 and sells them at ₹810 within the same day.

STT = 0.025% X ₹810 X 500  = ₹101.25

STT-SQUP =₹101.25

STT-RND = ₹0.25

2. Futures

For Equity and Index Futures, an STT of 0.01% is levied on the sell-side only. This is shown as ‘STT - SQUP’ in the Contract Note. 

Example:

A trader buys 1 lot of NIFTY Futures at ₹8700 and sells it at ₹8710. Lot size is 50.

STT = 0.0125% X ₹8710 X 50 = ₹54.43 

STT-RND =₹0.43

3. Options 

For Equity and Index Options, an STT of 0.0625% is levied on the sell-side (on premium). This is shown as ‘STT - SQUP’ in the Contract Note 

Example:

A trader sells a NIFTY Call Option at a premium of ₹100. Lot size is 50.

STT  = 0.0625% X  ₹100 X 50 = ₹3.12

STT-RND = ₹0.12

STT on the intrinsic value of Options that are bought and exercised is 0.125%

a. Intrinsic value of Call option = Spot Price - Strike Price

b. Intrinsic value of Put option = Strike Price - Spot Price

Example:

A trader buys a NIFTY Call Option with a strike price of ₹22,500 and its spot price (current price) is ₹22,600. The lot size is 50. 

Intrinsic value of call option = Spot Price - Strike Price =  ₹22,600 - ₹22,500 = ₹100

STT = 0.125% X 100 X 50 = ₹6 (₹6.25 rounded off to the nearest rupee)

STT-RND= ₹0.25

Note: Any charges that have been rounded will be denoted as "STT-RND".  Rounding off is done to ensure practicality, consistency, and accuracy in financial transactions.