Govt expects STT collections to cross Rs7,500 cr

Govt expects STT collections to cross Rs7,500 cr


New Delhi: 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 nearly 75% to Rs5,895 crore till 15 December this year, and are expected to touch Rs7,500 crore in 2007-08," a senior Finance Ministry official told PTI.

Finance Minister P Chidambaram had introduced STT in the Union Budget 2004-05. All investors in the stock market pay a fixed STT of 0.125% for every transaction in cash for delivery of shares. However, transactions in derivatives trading attract 0.017% tax.

While increase in corporate tax and personal income tax mop-up has been attributed to steady economic growth and rise in salaries of the middle class, STT collections have largely gone up due to increase in daily trading at the present high level, the official said.

During April-October period, STT collections registered a growth of 57.61% and stood 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 about Rs20,000 crore, including about Rs14,000 crore at NSE. The 30-share Sensex of BSE touched 19,854 points on 24 December, rising from 14,000 level on 1 April this year.