STT, or Securities Transaction Tax, is a tax levied on securities trades (not on commodities 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.

Equity: If the trade is an equity delivery trade, then a tax of 0.1% on the turnover is levied on both the buy-side and sell sides of each trade. However, if the trade is squared off (closed) within the same trading day, meaning it is an intra-day transaction, then the STT rate applicable is 0.025% on the sell-side trade(s) only.

For example, assuming a trader buys 500 shares of Reliance Stock at Rs. 800 and sells it at Rs. 810. Since he sold it within the same day, an STT charge of
STT = 0.025% (STT rate) x 810 (selling price) x 500 (shares)
= Rs. 101.25
would be levied on the transaction.

Futures and Options: The STT rate applicable for Equity and Index Futures trades is set at 0.01% on Futures sell-side turnover.
For example, assuming a trader buys 10 lots of Nifty Futures at Rs. 6000 and sells it at Rs. 6010. Since the lot size of Nifty is 50, an STT charge of

STT = 0.01% (STT rate) x 8700 (selling price) x 10 (lots) x 25 (lot size of Nifty)
= Rs. 217.50 
would be levied on the transaction.