Securities Transaction Tax, commonly known as STT, is a tax charged on certain transactions involving securities in India. Investors and traders generally see STT as a separate charge in their contract notes when they buy or sell shares, futures or options. Because STT is charged in addition to brokerage and other transaction-related costs, understanding how it works is important when calculating the actual cost and profitability of a trade.
STT rates can differ depending on the type of security and transaction. In 2026, the rates for certain derivatives were revised, making STT particularly relevant for futures and options traders. The revised rates came into effect from April 1, 2026.
What Is Securities Transaction Tax?
Securities Transaction Tax is a tax imposed on specified transactions in securities carried out through recognized stock exchanges. It is generally collected by the stock exchange or intermediary and subsequently deposited with the government.
Unlike brokerage, STT is not a fee charged by your broker for providing trading services. It is a statutory tax. The amount depends on the type and value of the transaction, and the responsibility for paying it can fall on the buyer or seller depending on the transaction.
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For example, in a normal delivery-based equity transaction, STT is charged at 0.10% on the purchase and 0.10% on the sale. The buyer pays STT on the purchase and the seller pays it on the sale. These rates remained unchanged from April 1, 2026.
Current STT Rates in India in 2026
The STT structure differs between equity delivery, non-delivery equity transactions and derivatives.
| Transaction | STT Rate From April 1, 2026 | Paid By |
|---|---|---|
| Equity delivery – purchase | 0.10% | Buyer |
| Equity delivery – sale | 0.10% | Seller |
| Equity non-delivery – sale | 0.025% | Seller |
| Equity options – sale | 0.15% of premium | Seller |
| Equity options – exercised | 0.15% of intrinsic value | Buyer |
| Equity futures – sale | 0.05% | Seller |
| Equity-oriented fund – sale | 0.001% | Seller |
The rates above are based on the current NSE STT schedule.
How Is STT Calculated on Delivery-Based Stocks?
Suppose an investor purchases shares worth ₹1,00,000 for delivery. At the current STT rate of 0.10%, the STT on the purchase would be ₹100.
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If the investor later sells those shares for ₹1,20,000, the STT on the sale would be ₹120 at the same 0.10% rate.
Therefore, the total STT across the purchase and sale would be ₹220.
This is separate from other applicable charges such as brokerage, exchange transaction charges, SEBI turnover fees, GST and stamp duty.
How Is STT Charged on Intraday Equity Trading?
For equity transactions that are settled otherwise than through actual delivery, STT is charged on the sale transaction. The current rate is 0.025%, payable by the seller.
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For example, if an intraday trader sells shares worth ₹2,00,000, the STT would be ₹50.
This is one reason traders need to consider transaction costs when calculating their actual trading performance. A strategy that appears profitable before costs can produce a different net result after brokerage, STT and other applicable charges.
What Is the STT on Futures in 2026?
STT on the sale of futures in securities increased from 0.02% to 0.05% from April 1, 2026. The tax is payable by the seller and is calculated on the traded value of the futures contract.
For example, if the taxable futures transaction value is ₹10 lakh, an STT rate of 0.05% would result in ₹500 of STT.
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The increase applies to futures transactions entered into on or after April 1, 2026.
What Is the STT on Options?
The STT treatment for options is different because the taxable value for a normal sale of an option is based on the option premium.
From April 1, 2026, STT on the sale of an option increased from 0.10% to 0.15% of the option premium. The seller is responsible for the STT.
For example, if an option is sold for a premium value of ₹50,000, STT at 0.15% would be ₹75.
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There is a separate rule when an option is exercised. In that situation, STT is charged at 0.15% of the intrinsic value and is payable by the purchaser.
STT vs Brokerage and Other Charges
STT is only one component of the total cost of a stock-market transaction. Investors may also see brokerage, exchange transaction charges, SEBI turnover fees, GST, stamp duty and other applicable charges on their contract notes.
SEBI turnover fees, for example, are separate from STT. NSE currently lists the SEBI turnover fee for applicable non-debt securities transactions at 0.0001%, or ₹10 per crore.
This distinction matters because looking only at STT does not give an investor the complete cost of executing a trade.
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Does STT Affect Your Trading Profit?
Yes. STT forms part of the transaction costs associated with eligible trades. Therefore, traders should consider it when calculating their net trading result.
This becomes particularly relevant for frequent traders because repeated transactions can accumulate significant statutory and other trading costs over time. The actual impact depends on the type, size and frequency of transactions.
STT should also not be confused with capital gains tax. STT is a transaction-based tax, while capital gains tax is related to taxable gains from the transfer of capital assets and follows separate rules.
Where Can You See STT?
STT is normally displayed separately in a broker’s contract note or trade statement. Investors can therefore check the transaction details after trades are executed rather than manually estimating every charge.
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For anyone trading frequently, reviewing the contract note periodically can help identify how much is being paid in STT and other transaction costs.
Why STT Matters for Investors and Traders
STT may appear to be a small percentage on an individual transaction, but the calculation can become important when transaction values are large or trades are frequent. The 2026 changes to futures and options also make it particularly important for derivatives traders to understand the current rates.
For long-term equity investors, the 0.10% delivery-based rates on both purchase and sale remain unchanged from the previous period. For traders, the applicable rate depends on whether the transaction involves intraday equity, futures or options.
Understanding STT alongside brokerage, GST, exchange charges and other applicable costs gives investors a clearer picture of the actual cost of trading in the Indian stock market.
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Financial Disclaimer: This article is for educational and informational purposes only and should not be considered investment, tax or financial advice. Tax rules and rates can change, and the actual tax treatment may depend on the nature of the transaction and the taxpayer’s circumstances. Onetrader is not a SEBI-registered investment adviser. Investors and traders should verify applicable rules and consult a qualified tax professional before making financial decisions.
