What is STT in the stock market?
STT — Securities Transaction Tax — is a small but unavoidable tax the Indian government collects on every securities trade executed on NSE and BSE. It is identical across brokers, levied at the time of trade, and visible as a line item on the contract note. Here are the rates, when they apply, and how STT fits into your total trading cost.
What STT is
STT was introduced in 2004 as a transaction-based tax on securities. The government collects it directly from the exchange on every trade, which removes the need to track and tax capital gains at source — STT is the at-source levy on the trade itself. STT is not deductible against other taxes; it is a pure expense per trade.
STT rates by segment
Different rates apply to different segments. Current rates (verify on the official FM circular before relying on these for tax purposes):
- Equity delivery — 0.1 % on both buy and sell sides. So a ₹1,00,000 delivery trade incurs ₹100 STT on buy + ₹100 on sell.
- Equity intraday — 0.025 % on the sell side only. A ₹1,00,000 intraday sell incurs ₹25 STT.
- Equity futures — 0.02 % on the sell side only.
- Equity options — 0.10 % on the premium for sell-side; 0.125 % on the strike value when an option is exercised.
- Mutual fund redemption — 0.001 % on equity-oriented schemes.
Why STT matters
STT is one of the five components that make up the total cost of an Indian trade, alongside brokerage, exchange transaction charges, SEBI fee, stamp duty and GST. On a typical retail trade, STT is often larger than brokerage — particularly on delivery trades where both legs are taxed.
STT is also why the brokerage calculator on each broker page on this site shows an "all-in landed cost" rather than just brokerage — a ₹0-brokerage broker still has the same STT bill as a ₹20-brokerage broker, because STT is government-mandated and identical.
STT and tax filing
Equity capital gains taxation in India is independent of STT — you still calculate short-term (15 %) and long-term (10 % above ₹1L) gains and pay separately. STT was once deductible against capital-gains tax; that benefit was removed years ago. Today STT is just a transaction cost. F&O traders treat STT as a deductible business expense if F&O income is reported as business income.
Frequently asked
What people ask about what is stt in the stock market?.
The government. The broker only collects and remits it on your behalf as part of the standard contract note. The rate is fixed by the Finance Ministry; brokers cannot waive it.
No. STT is a transaction tax, not a deposit. It cannot be refunded or credited against other tax liabilities (it used to be deductible against capital-gains tax — that benefit was removed).
Yes, on equity-oriented mutual fund redemptions at 0.001 %. The rate is tiny but it is there. Debt mutual funds do not attract STT.
STT is listed as a separate line item on the daily contract note your broker sends by email. It is also broken out in the broker's charges page and on most brokerage calculators.