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STT & Capital gain tax

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Parthesh

72 Points Posted on 23 September 2020

As there is STT and Capital gain tax on sale of securities. Means Double taxation on sale of securities?

Replies (2)

Quick Summary

This discussion clarifies the distinction between Securities Transaction Tax (STT) and Capital Gains Tax. While both apply to the sale of securities, they are not the same and do not constitute double taxation. STT is a small transaction-based levy, whereas Capital Gains Tax applies only to profits. Furthermore, STT paid can be deducted as a business expense for traders, and GST is not applicable to securities sales.

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 23 September 2020

It's not a Double Taxation. STT and Capital Gain tax both are two different things. STT levied on sale and Purchase transaction, whereas Capital Gain tax is on Profit Portions only. And Rate of STT is also minor % like 0.001 to 0.1 only, which can't be comparable with income tax rate..

And In case of person who is trading in securities and offering income/loss from such trading as business income, STT paid is allowed to be deducted as business expense.

And also, GST is not leviable on sale of securities, on sale of other things like other Goods GST is applicable..