What is Securities Transaction Tax (STT) and how is it calculated?
Securities Transaction Tax (STT) is a tax on buying and selling stocks and other securities on Indian stock exchanges. As per the NSE circular (PDF) the STT charges are revised from 1st October 2024.
The table below explains the STT for various types of orders:
Order type | New charges | Old charges |
Equity intraday | 0.025% (₹25 per lakh) on the sell side. | 0.025% (₹25 per lakh) on the sell side. |
Equity delivery | 0.1% (₹100 per lakh) on both the buy and sell side. | 0.1% (₹100 per lakh) on both the buy and sell side. |
Options |
0.125% of the intrinsic value on options that are bought and exercised.
0.1% of the premium for options that are shorted. |
0.125% of the intrinsic value on options that are bought and exercised.
0.0625% of the premium for options that are shorted. |
Futures | 0.02% (₹20 per lakh) on the sell side. | 0.0125% (₹12.5 per lakh) on the sell side. |
Since the STT is charged on both the buy and sell side for delivery trades, the average price is to be calculated. The formula to calculate the average price is:
Average price = (Buy Qty*Buy Price) + (Sell Qty*Sell Price) / (Buy Qty+Sell Qty)
Average price = (Total cost to buy shares) + (Total revenue from selling shares) / (Total number of shares bought and sold)
Example scenarios
-
Equity intraday
- Buy: 500 shares at ₹100 each.
- Sell: 500 shares at ₹105 each.
- Average price = (500 * ₹100) + (500 * ₹105) / 1000 = ₹102.5
- STT (on sell side) = 500 (shares sold) * 102.5 (average price) * 0.025% = ₹13 (₹12.81 rounded off to the nearest rupee)
-
Equity delivery
- 1st October 2024 Buy: 500 shares at ₹100 each.
- 3rd October 2024 Sell: 500 shares at ₹105 each.
-
STT Buy = 500 (shares bought) * 100 * 0.1% = ₹50
- STT Sell: 500 (shares sold) * 105 * 0.1% = ₹53( ₹52.50 rounded off to the nearest rupee)
-
Options
-
STT on the intrinsic value of an exercised option contract
-
1 lot of CE = 50 units
- Strike price = ₹17,300
- Spot price = ₹17,350
- Intrinsic Value for 1 lot = (₹17,350 - ₹17,300) * 50 units = ₹2,500
- STT on intrinsic value = 0.125% * ₹2,500 = ₹3 (₹3.125 rounded off to the nearest rupee)
-
1 lot of CE = 50 units
-
STT on premium
- 1 lot = 50 units
- Strike price = ₹17,300
- Premium received = ₹60 for one lot
- Total Premium received = ₹60 * 50 units = ₹3,000
- STT on premium = 0.1% * ₹3,000 = ₹3
-
STT on the intrinsic value of an exercised option contract
-
Futures
- Sell: 1 Lot of XYZ futures contracts.
- Price of 1 lot = ₹7,50,000
- STT (on sell side) = 0.02% * ₹7,50,000 = ₹150
The Zerodha charges page lists all the charges involved in trading and investing. You can also use the brokerage calculator to calculate charges for any trade.
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