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Securities Transaction Tax (STT): - Securities Transaction Tax is type of Tax levied on Purchase or Sale of Securities (Equity Shares, Equity Oriented Mutual Fund, and Option Contracts in Securities and Futures in Securities etc.)  through recognized stock exchange. Any Assesse who held securities as Stock in Trade can claim dedication under sec 36(1)(XV) of Income Tax Act for Payment of Securities Transaction Tax made on Purchase or Sale Securities (Equity Shares, Equity Oriented Mutual Fund, Option Contracts in Securities and Futures in Securities etc.). Any Assesse who hold securities for Capital Appreciation or Dividend Income cannot Claim Deduction from Capital Gain Aries on Sale of Securities (Equity Shares, Equity Oriented Mutual Fund, and Option Contracts in Securities and Futures in Securities etc.)      

 

Deduction or Collection of Securities Transaction Tax (STT)

·         Every Recognized Stock Exchange shall be liable to collect Securities Transaction Tax (STT) on Purchase or Sale of Securities though such Stock Exchange at Rate Prescribed.  

·         Every Mutual Fund shall be liable to collect Securities Transaction Tax (STT) on Purchase or Sale of Units Mutual Fund at Rate Prescribed.

·         Lead Merchant Banker of Company Shall be liable to Collect Securities Transaction Tax (STT) on Initial Public Issue made by Company which appoints such Lead Merchant Banker at Rate Prescribed.

Due Date for Payment of Securities Transaction Tax (STT): - Every Recognized Stock Exchange, Mutual Fund and Lead Merchant Banker Liable to Pay Securities Transaction Tax (STT) on or before 7th of Month Following to Month in which Securities Transaction Tax (STT) is collected.

 

Return Filing of Securities Transaction Tax (STT)

·         Every Recognized Stock Exchange shall be liable to Return in Form 1 Every Year on or before 30th June of Financial Year Succeeding to Financial Year in which Securities Transaction Tax (STT) is collected.

·         Every Recognized Mutual Fund shall be liable to Return in Form 2 Every Year on or before 30th June of Financial Year Succeeding to Financial Year in which Securities Transaction Tax (STT) is collected.  

 

Penal Provision for Non Collection or Non Deposit or Late Deposit of Securities Transaction and Non Filing of Return

·         If any Recognized Stock Exchange or Mutual Fund or Lead Merchant Banker fails to Collect Securities Transaction Tax (STT) shall be liable to Pay Simple Interest at the Rate of 1% per Month or Part of Month and Liable Penalty of an amount equal to 100% of Securities Transaction Tax (STT) required to collect.

·          If any Recognized Stock Exchange or Mutual Fund or Lead Merchant Banker fails to Pay Securities Transaction Tax (STT) shall be liable Penalty of Rs. 1000 for each day of default subject to Maximum amount equal to 100% of Securities Transaction Tax (STT) required to collect.

·          If any Recognized Stock Exchange or Mutual Fund fails to file Return of Collected Securities Transaction Tax (STT) shall be liable Penalty of Rs. 100 for each day of default.

·         If any Recognized Stock Exchange or Mutual Fund or Lead Merchant Banker fails to Comply with Notice issued in Proceeding shall be liable Penalty of Rs. 1000 for each day of default.

Note: - Opportunity of Being Heard to be given before Imposing any Penalty and No Penalty can be imposed if there is reasonable cause for Default in Collection or Payment of Securities Transaction Tax (STT) or Default in Filing Return of Securities Transaction Tax (STT) is collected.   

 

Rate of Securities Transaction Tax (STT)

·         Every Purchaser or Seller of Equity Shares on Purchase or Sale of Equity Share through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.1% of Taxable Value of Transaction of Buy or Sale of Security.

·         Every Purchaser of Equity Oriented Unit of Mutual Fund on Purchase of Equity Oriented Unit of Mutual Fund through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.1% of Taxable Value of Transaction of Buy of Equity Oriented Unit of Mutual Fund.   

·         Every Seller of Equity Oriented Unit of Mutual Fund on Sale of Equity Oriented Unit of Mutual Fund through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.025% of Taxable Value of Transaction of Sale of Equity Oriented Unit of Mutual Fund.   

·         Every Seller (Writer) of Option Contract in Securities on Sale (Write) of Option Contract in Securities through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.017% of Taxable Value of Option Premium Received on Sale (Write) of Option Contract in Securities.

·         Every Seller of Futures in Securities on Purchase or Sale of Equity Share through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.01% of Taxable Value of Transaction of Sale of Future in Securities.

·         Every Seller (Writer) of Option Contract in Securities on Sale (Write) of Option Contract which Exercised by Buyer of Option in Securities through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.125% of Taxable Value of Option Premium Received on Sale (Write) of Option Contract in Securities.

·         Every Seller of Equity Oriented Unit of Mutual Fund on Sale of Equity Oriented Unit of Mutual Fund to Mutual Fund through Recognized Stock Exchange shall be Liable to Pay Securities Transaction Tax (STT) at Rate of 0.025% of Taxable Value of Transaction of Sale of Equity Oriented Unit of Mutual Fund.

 

Assessment and Rectification by Assessing and Appeal against order of Assessing Officer

Assessing Officer can pass Assessment Order in writing or he / She may issue notice to aggrieved assessee if Assessing Officer deems fit. However Assessee have right to file Appeal against Order of Assessment made by Assessing Officer against him or her or Notice issued to him  to Commissioner Income Tax (CIT ) – Appeals or Income Tax Appellate Tribunal. Any Assessee who required furnishing return of Securities Transaction Collected can furnish or Revise Return if furnished earlier any time before any assessment order is made.