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Consider the following statements regarding the Securities Transaction Tax (STT):
- It is an indirect tax charged on the purchase and sale of securities listed on the recognized stock exchanges in India.
- The rate of STT is different for different types of securities.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding the Securities Transaction...
The government recently hiked the securities transaction tax (STT) by 23.52 percent on the sale of options and 25 percent on the sale of futures contracts.
About Securities Transaction Tax (STT):
- What is it? It is a direct tax charged on the purchase and sale of securities listed on the recognized stock exchanges in India.
- It is levied and collected by the central government of India.
- STT is governed by Securities Transaction Tax Act (STT Act), and STT Act has specifically listed various taxable securities transactions, i.e., transactions on which STT is leviable.
- Taxable securities include equities, derivatives, or equity-oriented mutual funds investment units (excluding commodities and currency).
- The rate of taxation is different for different types of securities.
- STT is not applicable to off-market transactions or to commodity or currency transactions.
- The liability of applying the STT is on the broker when the client undertakes transactions in the stock market. The collected amount is then paid to the government.
- The charges and rate of STT are reflected on the contract notes which a broker provides to its clients for every execution of trades.
Hence only statement 2 is correct.
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Community Answer
Consider the following statements regarding the Securities Transaction...
Statement 1: It is an indirect tax charged on the purchase and sale of securities listed on the recognized stock exchanges in India.
Statement 2: The rate of STT is different for different types of securities.
Explanation:
Securities Transaction Tax (STT) is a tax levied on the purchase and sale of securities listed on the recognized stock exchanges in India. It was introduced in 2004 as a part of the Indian Finance Act and is collected by the stock exchanges on behalf of the government.
Statement 1: It is an indirect tax charged on the purchase and sale of securities listed on the recognized stock exchanges in India.
The first statement is correct. STT is an indirect tax that is charged on the purchase and sale of securities such as stocks, bonds, debentures, mutual funds, and derivatives on the recognized stock exchanges in India. It is levied on the transaction value of such securities.
Statement 2: The rate of STT is different for different types of securities.
The second statement is incorrect. The rate of STT is not different for different types of securities. The rate of STT is uniform across all types of securities and is determined by the government. The rates are periodically revised by the government and are applicable to all transactions of securities listed on the recognized stock exchanges.
To summarize, the correct answer is option B - 2 only. The first statement is correct, but the second statement is incorrect as the rate of STT is not different for different types of securities.
Statement 2: The rate of STT is different for different types of securities.
Explanation:
Securities Transaction Tax (STT) is a tax levied on the purchase and sale of securities listed on the recognized stock exchanges in India. It was introduced in 2004 as a part of the Indian Finance Act and is collected by the stock exchanges on behalf of the government.
Statement 1: It is an indirect tax charged on the purchase and sale of securities listed on the recognized stock exchanges in India.
The first statement is correct. STT is an indirect tax that is charged on the purchase and sale of securities such as stocks, bonds, debentures, mutual funds, and derivatives on the recognized stock exchanges in India. It is levied on the transaction value of such securities.
Statement 2: The rate of STT is different for different types of securities.
The second statement is incorrect. The rate of STT is not different for different types of securities. The rate of STT is uniform across all types of securities and is determined by the government. The rates are periodically revised by the government and are applicable to all transactions of securities listed on the recognized stock exchanges.
To summarize, the correct answer is option B - 2 only. The first statement is correct, but the second statement is incorrect as the rate of STT is not different for different types of securities.
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Consider the following statements regarding the Securities Transaction Tax (STT): It is an indirect tax charged on the purchase and sale of securities listed on the recognized stock exchanges in India. The rate of STT is different for different types of securities.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?
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