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Govt expects STT collections to cross Rs7,500 cr

Govt expects STT collections to cross Rs7,500 cr
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First Published: Tue, Dec 25 2007. 12 23 PM IST
Updated: Tue, Dec 25 2007. 12 23 PM IST
PTI
New Delhi: The government expects to reap rich dividends from the high volatility in the stock market with total security transaction tax (STT) likely to touch Rs7,500 crore in the current fiscal.
“Thanks to the action in the stock market, STT collections rose 75% to Rs5,895 crore till 15 December this year, and are expected to touch Rs7,500 crore in 2007-08,” a Finance Ministry official told PTI.
Finance Minister P Chidambaram had introduced STT in the 2004-05 Budget. All investors in the stock market pay a fixed STT of 0.125% for all transactions in cash for delivery of shares. Transactions in derivatives trading attract 0.017% tax.
While the increase in corporate tax and personal income tax mop-ups has been attributed to steady economic growth and rise in middle-class salaries, STT collections have largely gone up due to increase in daily trading, the official said.
During April-October period, STT collections rose 57.61% at Rs3,783 crore. The ministry is expecting that with high volatility continuing in the stock markets, the trading volumes may go up further in the last quarter, adding more to the exchequer.
The average daily trading at the BSE and NSE has gone up to Rs20,000 crore, including Rs14,000 crore at NSE. The 30-share Sensex of BSE touched 19,854 points on 24 December, rising from 5,694 points on 1 April this year.
The Nifty stood at 5,985 points on 24 December against 3,633 points on 1 April 2007. The Sensex has crossed 20,000 and Nifty surpassed 6,000 since then.
Meanwhile, the government is expecting to cross Rs3,00,000 crore collections from direct taxes as against the budget estimates of Rs2,67,490 crore for 2007-08.
According to the Central Board of Direct Taxes, the net collections have already touched Rs2,00,000 crore as on 20 December.
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First Published: Tue, Dec 25 2007. 12 23 PM IST