1. What is Securities Transaction Tax (STT)?

Securities Transaction Tax (STT) is a tax levied on transactions involving the purchase or sale of equity shares, derivatives, and equity-oriented mutual fund units. It is calculated as a percentage of the transaction value.

2. How Does the Calculator Work?

The calculator uses the STT formula:

Where:

• \( Value \) — Transaction value in dollars ($)
• \( Rate \) — Applicable STT rate as a percentage (%)

Explanation: The formula calculates the tax amount by multiplying the transaction value by the tax rate (converted from percentage to decimal).

3. Importance of STT Calculation

Details: Accurate STT calculation is essential for investors, traders, and financial institutions to determine tax liabilities, comply with regulations, and accurately report transactions to tax authorities.

4. Using the Calculator

Tips: Enter the transaction value in dollars and the applicable STT rate as a percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What types of securities are subject to STT?
A: STT applies to equity shares, derivatives, and equity-oriented mutual fund units traded on recognized stock exchanges.

Q2: Who is responsible for paying STT?
A: The buyer pays STT on purchase transactions, while the seller pays STT on sale transactions. The stock broker typically collects and remits the tax.

Q3: Are there different STT rates for different securities?
A: Yes, STT rates vary depending on the type of security and the nature of the transaction (delivery-based vs. intraday, futures vs. options, etc.).

Q4: Is STT deductible from income tax?
A: In many jurisdictions, STT paid can be claimed as a deduction when calculating capital gains tax liability.

Q5: How often is STT collected?
A: STT is collected on every taxable transaction at the time of trade execution by the stock broker.