How to Calculate STT Charges in Intraday?

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How to Calculate STT Charges in Intraday?

Are you an Intraday Trader? & Are You Know about How to Calculate STT Charges in Intraday?

Then, you need to know about all the charges that are levied in the Intraday Trading.

There are many types of charges applicable in the Intraday Trading.

From them through this article we will try to see “How to Calculate STT Charges in Intraday?”

STT is one of the charges that are applied in the Intraday Trading.

Now, at first, we will talk about in brief about “What is STT Means and how it Works?”

As an intraday trader, you need to have the complete knowledge about the charges that are applicable to your every transaction.

You need to ask your broker about the charges if in case he didn’t explain to you about them in the details in the first place.

Choose the brokerage firm that has correct charges that you are capable to pay for.

Let’s continue with the article

Starting with,

What is STT?

STT stands for Securities Transaction Tax.

This is one kind of tax that is needed to be paid by the investors or the traders to the Central Government.

This was introduced back in 2004-05, it made the capital market to be simplified collect the taxation from the investors or the traders on their investments or trading in India.

It makes it to be tax efficient.

The STT charge will only be collected when you had conducted the transaction at that time only broker can collect this charge on the transaction.

These charges are already mentioned in the contract note of the investors or the traders that is issued by their broker.

This tax is levied on all types of securities like the equities, options and futures in which you have made the gained and if it is done in the Indian Stock Exchange.

This is the direct tax that is applied by the Central government and that collect it.

The rate of taxation has been different from one security to another one.

Securities Transaction Tax can be defined as the type of tax that is levied when the transaction has been done.

This taxation of STT is only applicable if the transaction has been made in the Indian Stock Exchange only.

How is STT Charged?

1. For Cash Market (Equity) Transactions:

  • Securities Transaction Tax on the Intraday Trades:

STT is charged on the sell side of the transaction at around 0.0025%.

  • Securities Transaction Tax on the Delivery and BTST Trades:

STT is charged on both the sides of the transaction that is both the buyer and seller at around 0.01%.

There is another advantage of STT is that, the capital gains on the securities transaction are charged on the preferential rate.

For the STCG (Short-Term Capital Gains), the tax that is levied is 15%.

For the LTCG (Long-Term Capital Gains), the tax rate is 0% as they are exempt from the STT charges.

2. For Futures Market Transaction:

  • Securities Transaction Tax on Futures:

STT will be charged on the sell side of the transaction, regardless of whether it is intraday or positional trade.

The taxation rate is 0.01%.

3. For Option Market Transaction:

  • Securities Transaction Tax on Selling Options:

This is similar to the future and STT is payable on the premium value of the sell side of the transaction.

Securities on Which STT levied

Let us see the list in which it states the types of securities in which the STT levied:

  • Derivatives
  • Government Securities
  • Shares, bonds, debentures or any of the marketable security
  • Mutual Funds based on the equity trades

Securities Transaction Tax and Income Tax

An investor or the trader can do the trades for both the purpose like for business or investment purpose also.

In both these cases, STT that is levied by the Government get varies and for that purpose, there are two categories for the same:

  • Income from Share Trading as Profession
  • Income from Capital Gains

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