---
title: "Securities Transaction Tax (STT): Meaning & Rates"
description: "Securities Transaction Tax (STT) is a direct tax on securities traded in India, crucial for investors and traders on recognized stock exchanges."
url: "https://modeldiplomat.com/learn/glossary/securities-transaction-tax"
---

[New](https://modeldiplomat.com/)

#

Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- The Securities Transaction Tax is a direct tax levied in India on the value of securities transacted through recognised stock exchanges under the Securities Transaction Tax Act, 2004.
- Is STT a direct tax or an indirect tax?
- How does STT interact with capital gains tax?
- Who actually collects and remits STT to the government?
- Why does the government keep raising STT on derivatives?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

Go beyond the definition

## Research Securities Transaction Tax (STT) like a delegate

Model Diplomat's AI drafts position papers, speeches, and country research with real sources — built for MUN and politics students.

## Timeline

1. 1 October 2004

   The Securities Transaction Tax (STT) was introduced by the Finance Act, 2004 and operationalised through the standalone Securities Transaction Tax Act, 2004,…

2. 1 October 2024

   The Union Budget 2024-25, presented in July 2024, further increased STT on futures to 0.02 per cent and on options to 0.1 per cent of the premium, effective…

## Research it like a delegate

Research on modeldiplomat.com

## Ask a follow-up about Securities Transaction Tax (STT)

Open a cited briefing in Model Diplomat search — timelines, positions, and sources you can use in committee or exam answers.

[Start research on Securities Transaction Tax (STT)](https://modeldiplomat.com/search?q=Explain%20Securities%20Transaction%20Tax%20\(STT\)%20%E2%80%94%20key%20dates%2C%20actors%2C%20positions%2C%20and%20sources)

Example

In the Union Budget 2024-25, Finance Minister Nirmala Sitharaman raised STT on equity options to 0.1 per cent of premium and on futures to 0.02 per cent, effective 1 October 2024, to curb retail derivatives speculation.

Keep learning

## Go deeper than the definition

[Explore all Civil Service & Diplomatic Exams lessons](https://modeldiplomat.com/learn/civil-services)[Test yourself with a quiz](https://modeldiplomat.com/learn/glossary/quiz/civil-services)

## Take Securities Transaction Tax (STT) beyond the glossary

Ask the AI research engine built for diplomacy — get briefings, position papers, and speeches with sources you can cite in committee.