Govt's securities transaction tax collection jumps 128% in FY25 so far to ₹16,634 crore

The government's collection via securities transaction tax (STT) jumped by a massive 128% in fiscal year 2024-25 (FY25) so far, as per the data released by the Central Board of Direct Taxes (CBDT).

STT is the tax imposed on all equity trades in the stock market. Between April 1 and July 11 this year, the Centre collected ₹16,634 crore through the tax. In the corresponding period of FY24, the amount stood at ₹7,285 crore.

The doubling of collection through the securities transaction tax highlights the growing volume of equity trades, and the increasing participation of investors in the Indian stock market.

Explained: What is STT?

STT is a tax levied on securities trades (not on commodities or currency trades). Different STT rates are applicable for equity (cash) and futures and options (F&O) transactions. STT is levied on trades on the National Stock Exchange (NSE), BSE, and other recognised stock exchanges. For commodities, CTT (Commodities Transaction Tax) is levied.

If the trade is a equity delivery trade, then a tax of 0.1% on the turnover is levied on both the buy side and sell sides of each trade. However, if the trade is squared off (closed) within the same trading day, meaning it is an intra-day transaction, then the STT rate applicable is 0.025% on the sell-side trade(s) only.

Direct tax collection soars 19.5%

Meanwhile, the CBDT also released the overall direct tax collection data. The net mop-up between April 1 and July 11 increased by 19.5% to ₹5.74 lakh crore. The jump was primarily on account of higher advance tax payment by corporates.

The first instalment of advance tax, which was due on June 15, rose 27.34% to ₹1.48 lakh crore. This includes Corporation Income Tax (CIT) at ₹1.14 lakh crore and Personal Income Tax (PIT) at ₹34,470 crore.

"The net direct tax collection of ₹5,74,357 crore (as of July 11, 2024) includes CIT at ₹2,10,274 crore and PIT at ₹3,46,036 crore," the CBDT said.

During the same period last year, net direct tax collection was ₹4,80,458 crore.

Refunds amounting to ₹70,902 crore have also been issued in FY25 till July 11, which is 64.4% higher than refunds issued during the same period in the previous year.

For April-July 11, gross collection of direct taxes (before adjusting for refunds) stood at ₹6.45 lakh crore compared to ₹5.23 lakh crore in the year-ago period, showing a growth of 23.24%.

For full fiscal year, the interim budget has pegged direct tax collection at ₹21.99 lakh crore.