What is Securities Transaction Tax (STT) and how is it Calculated?

Post Date : February 24, 2025

What is Securities Transaction Tax (STT) and how is it Calculated?

Securities Transaction Tax (STT) is a tax imposed on the buying and selling of securities such as stocks, futures, options, and other financial instruments traded on Indian stock exchanges. This tax ensures transparency in transactions and contributes to government revenues.

According to the NSE circular, STT charges were revised effective from 1st October 2024. Below are the updated rates and detailed explanations on how STT is calculated for various transaction types.

STT Rates

Calculation Rules

NOTE:

• If the portion of  paise in STT is 50 or more, it is rounded off to the nearest rupee.
• If the paise is less than 50, it is rounded down to the nearest rupee.
• For instance, an STT of ₹100.60 is rounded off to ₹101, while ₹100.40 is rounded down to ₹100.

Since the STT is charged on both the buy and sell side for delivery trades, the average price is to be calculated. The formula to calculate the average price is:

Average price = (Buy Qty*Buy Price) + (Sell Qty*Sell Price) / (Buy Qty+ Sell Qty)
Average price = (Total cost to buy shares) + (Total revenue from selling shares) / (Total number of shares bought and sold)

Example Scenarios

Equity Intraday

Buy: 500 shares at ₹100 each.

Sell: 500 shares at ₹105 each.

Average Price = (500 × ₹100) + (500 × ₹105) / 1000 = ₹102.5 

STT (on sell side) = 500 (Shares sold) × 102.5 (average price) × 0.025 % = ₹12.81 (rounded off to the nearest rupee).

Equity Delivery

• Buy: 500 shares at ₹100 each (on 1st October 2024).
• Sell: 500 shares at ₹105 each (on 3rd October 2024).
• STT (Buy) = 500 (Shares bought) × 100 × 0.1% = ₹50.
• STT (Sell) = 500 (Shares Sold) × 105 × 0.1%  = ₹53 (52.50 rounded off to the nearest rupee)

Options

1. STT on the Intrinsic Value of an Exercised Option Contract
   • 1 Lot of CE: 50 units.
   • Strike Price: ₹17,300.
   • Spot Price: ₹17,350.
   • Intrinsic Value: (₹17,350 − ₹17,300) × 50 units = ₹2,500
   • STT on intrinsic value: 0.125% × ₹2,500 = ₹3 ( ₹ 3.125 rounded off to the nearest rupee)

1. STT on Premium

• Lot Size: 50 units.
• Strike Price: ₹17,300.
• Premium: ₹60 per lot.
• Total Premium: ₹60 × 50 units = ₹3,000
• STT on premium: 0.1%×₹3,000 = ₹3.

Futures

• Sell: 1 lot of XYZ futures contracts at ₹7, 50,000.
• STT (on sell side) = 0.02% × ₹7, 50,000 = ₹150.

You could also visit our official webpage if you are wants to know more about the other transaction charges as well https://rmoneyindia.com/charges-taxes/

For more information, contact RMoney at 0562-4266600 / 0562-7188900 or email us at askus@rmoneyindia.com

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