Key Highlights
- STT collections up by 87% this fiscal year.
- Total collections hit ₹30,630 crore by October 10.
- That’s 83% of the budget estimate for FY25.
- The government upped the STT target to ₹32,000 crore from ₹27,000 crore.
- Increased trading volume and stock derivatives are driving the growth.
What’s Going On?
The STT is really making headlines this year. Between April 1 and October 10, it jumped a staggering 87% compared to last year, reaching an impressive ₹30,630 crore. That’s a massive increase from last year’s ₹16,373 crore!
This amount covers about 83% of what the government estimated for the year, and analysts are buzzing that we might even exceed those expectations by the end of the year!
Why Such a Boost?
What’s driving this surge? It seems to be a mix of factors. The stock market is on a roll, which means more people are trading, leading to higher tax collections. Plus, there’s been a significant uptick in stock-based derivative trading, adding to the total.
And let’s not forget Finance Minister Nirmala Sitharaman’s recent announcement about raising the STT rates on stock derivatives. The proposed rates are set to increase to 0.02% for futures and 0.1% for options, which could give STT collections another push.
A Quick History Lesson
Just a bit of background: STT was introduced back in 2004 to tackle tax evasion on capital gains. Initially, it was set at 0.15% of the security’s value. For example, a ₹1,00,000 transaction would only cost you ₹150 in tax. The goal was to simplify the tax process compared to the more complicated capital gains tax.
Of course, it hasn’t all been smooth sailing. After some protests from brokers and traders, the government had to lower the STT rate in 2013. But it’s still a direct tax, which can add up for those who trade frequently.
