Day traders in export market are looking forward for an update regarding the Securities Transaction Tax (STT) by the Union Finance Minister Mr. Pranab Mukherjee in the forthcoming Union Budget.
As per the government’s proposed Direct Tax Code (DTC), STT is very likely to be abolished. The new tax code, DTC, has been welcomed by the Day-Trading community which, would do away with the STT in all probability thus, a change in STT is unlikely.
Rajesh Baheti, MD, Crosseas Capital Services, a Mumbai based arbitrage trading company said “I personally feel the FM is unlikely to propose any changes in STT in his Budget, with the government already planning to do away with the tax as part of DTC implementation.”Government has been collecting an incremental amount of tax since the introduction of STT in the 2004-05 Budget.As per the government’s proposed Direct Tax Code (DTC), STT is very likely to be abolished. The new tax code, DTC, has been welcomed by the Day-Trading community which, would do away with the STT in all probability thus, a change in STT is unlikely.
Currently, STT is charged at the rate of 0.125% on a delivery-based buy as well as sell transactions while 0.025% on non delivery-based sale transactions. The rate for F&O sale transactions is 0.017%.
The introduction of Direct Tax Code or the DTC is expected from April 2011 onwards.
