Share market basics
Securities Transaction Tax: a tax the government collects on every equity and derivatives trade on the exchange, deducted automatically by the broker.
STT, Securities Transaction Tax, is a government tax charged on the value of trades executed on Indian stock exchanges, collected by the broker and shown on your contract note. The rate depends on the segment. At the time of writing, delivery equity attracts 0.1% on both buy and sell, intraday equity 0.025% on the sell side, futures 0.02% on sale and options 0.1% on the sale premium; rates have been raised in recent budgets, so confirm the current schedule. Suppose you buy ₹1,00,000 of SBI for delivery and later sell for ₹1,10,000; STT is ₹100 on purchase and ₹110 on sale. On options that expire in the money and are exercised, STT is charged on the full settlement value, which can be a nasty surprise. STT is a cost of trading and is not refundable, though it reduces taxable business income for traders.
VideoA share is a portion of a company. The share market is where those portions change hands. Here is how it works, what you can trade in it, and why most people who trade actively lose money.
VideoThe share market runs on two activities that look alike and are nothing alike. Investing is owning a business for years. Trading is profiting from price moves over hours or weeks. Mixing them up is behind most early losses.
VideoTrading comes in a few distinct forms, and the one you pick decides how much time, capital and stress it takes. This lesson explains intraday, swing, positional, futures and options trading with Indian examples.
