Ripples Advisory, STT collections surge in buoyant market; govt rakes in Rs 111 bn in 2017-18
Securities transaction tax is levied on all stock market transactions. The tax is in the range of 0.017% and 0.125% of the transaction amount
Buoyancy in the stock markets has helped the government collect a record amount from the securities transaction tax (STT) in 2017-18.
According to an official with the income tax (I-T) department, the STT collection for the fiscal year stood at Rs 111.23 billion, an increase of 24 per cent over 2016-17. The amount is also 43 per cent higher than the Revised Estimates of Rs 77.7 billion.
Introduced in 2004, the STT is levied on all stock market transactions. The tax is in the range of 0.017 per cent and 0.125 per cent of the transaction amount.
The increase in STT collection is because of a high trading turnover, particularly in the derivatives segment. Derivative volumes on the National Stock Exchange (NSE) jumped 75 per cent in 2017-18 over the previous fiscal year. Combined cash volumes on the NSE and the BSE, too, rose 38 per cent in 2017-18.
The market has largely been on the upmove between April 2017 and January 2018. In the past two months, however, stocks have entered a correction mode. Despite the correction, trading turnover has been on the rise.
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