Securities transaction tax
Also called: STT
A small tax on every purchase or sale of shares and derivatives on an Indian exchange, collected by your broker.
STT has been charged since 2004. You never pay it separately: it appears on the contract note your broker sends after each trade, and it is the same whichever broker you use.
The rate depends on what you trade. Delivery trades in shares pay 0.1 percent on both the buy and the sell. Intraday share trades pay 0.025 percent, on the sell side only. Since 1 April 2026, futures pay 0.05 percent of the contract value and options 0.15 percent of the premium, both on the sell side.
Example
You buy shares worth 50,000 rupees for delivery and later sell them for 55,000. STT is 50 rupees on the purchase and 55 on the sale, 105 rupees in all.
Watch out
STT is charged on the value traded, whether you make money or lose it. Someone who turns over the same money many times a month pays it many times over.
Learn it properly in
Chapter 2.1: How to open a demat account in India, and what happens after you tap Buy