1. What is Securities Transaction Tax (STT)?

Securities Transaction Tax (STT) is a tax levied on transactions involving securities such as stocks, derivatives, and equity-oriented mutual funds. It is calculated as a percentage of the transaction value and is collected at the time of the transaction itself.

2. How Does the Calculator Work?

The calculator uses the STT formula:

Where:

• \( Turnover \) — Total value of securities transactions (currency)
• \( Rate \) — Applicable STT rate as a percentage (%)

Explanation: The formula calculates the tax amount by multiplying the transaction value by the applicable tax rate.

3. Importance of STT Calculation

Details: Accurate STT calculation is crucial for traders and investors to understand their transaction costs, comply with tax regulations, and accurately calculate their net returns from securities trading.

4. Using the Calculator

Tips: Enter the total turnover (transaction value) in your local currency and the applicable STT rate as a percentage. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Who is liable to pay STT?
A: STT is payable by both buyers and sellers of securities, though the rate may differ based on the type of transaction and the party involved.

Q2: Are all securities subject to STT?
A: Most equity-based securities are subject to STT, but the specific applicability and rates vary by jurisdiction and security type.

Q3: How does STT differ from capital gains tax?
A: STT is levied on the transaction value at the time of trade, while capital gains tax is calculated on the profit from the sale of securities.

Q4: Can STT be claimed as a deduction?
A: In many jurisdictions, STT paid can be deducted from total taxable income or used as a credit against other tax liabilities.

Q5: Do STT rates change frequently?
A: STT rates are set by government authorities and may change during budget announcements or as part of fiscal policy adjustments.