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Indian Markets

STT

Beginner

Also calledsecurities transaction tax

Securities transaction tax: a tax the Indian government charges on every trade made on a stock exchange.

What it means

It is collected automatically by the broker and applies whether the trade wins or loses. From April 2026 the rate is 0.05% of the value on selling futures and 0.15% of the premium on selling options. Shares bought for delivery pay 0.1% on both the buy and the sell, and intraday share trades 0.025% on the sell. Brokerage, exchange fees, stamp duty and GST come on top.

Example

Selling an option position worth ₹10,000 in premium costs ₹15 in STT.

In practice

STT is one of the larger parts of the cost of trading in India, and for active options and futures traders it adds up quickly. Adding it to brokerage, exchange charges, stamp duty and GST gives the real cost of a round trip, which a strategy has to beat before it makes anything.

Most brokers show a full breakdown of charges on the contract note for each day and offer a calculator to estimate them before a trade.

What to watch for

The rates on futures and options have been raised several times, most recently in April 2026, so a strategy that relied on very small gains per trade may no longer cover its costs. An option that expires in the money is taxed on its settlement value as well.

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