In the Union Budget for 2023–24 (April–March), the Securities Transaction Tax (STT) revenue estimation for the current fiscal year has been maintained as the previous year's levels.
The revenue from STT was estimated at ₹20,000 crore in the Union Budget for 2022–2023 fiscal year.
The government projected that it would receive ₹12,500 crore from STT in 2021–22, a figure that was substantially unchanged from the revised budget projection of ₹12,000 crore.
When stocks are bought and sold on Indian stock exchanges, a tax known as the STT is applied. For instance, 0.1% of the share's value must be paid as STT by both the buyer and the seller when purchasing an equity share.
Equity, derivatives, units of equity-oriented mutual funds, unlisted shares offered via a public offer for sale included in an initial public offering (IPO), and unlisted shares where such shares are subsequently listed in stock exchanges are all examples of taxable securities.
On October 1, 2004, this tax took effect after being included in the 2004 Union Budget. The goal of introducing STT was to reduce capital gains tax evasion on earnings made from trading securities.
STT is a tax that is paid at the source and is determined by the government. The STT collection provisions function similarly to tax deducted at source (TDS). In the case of an IPO, STT is collected by the lead merchant banker or a recognised stock exchange.