RBI Issues Circular On Levying Unfair Interest Charges On Customers

The STT charged on securities transactions is done through a stock exchange.

The government has collected Rs 8,800 crore in securities transaction tax (STT) by August against a budget target of Rs 12,500 crore. The buoyancy in the tax mop-up is attributed to the “overheated market.”

The growth in STT collection is 64% compared to Rs 5,291 crore in the same month last year, according to a report in the Business Standard. “The sharp increase in the STT collection can be attributed to an overheated market,” JB Mohapatra, chairman of the Central Board of Direct Taxes, told.

More than 70% of the budgetary target for STT collection has been achieved, with seven more months to go, owing to higher retail participation in the stock market.

In terms of direct tax collection, 2021-22 is the best year in the past four years, Mohapatra said, adding that this is because some sectors are doing wonderfully well. “Maybe there is pent-up demand in high revenue areas. Generally, corporates are doing well,” he said.

The STT charged on securities transactions is done through a stock exchange. No STT is applicable if the transaction is done outside the bourses. This tax is levied at the rate of 0.1% of the turnover on equity transactions deliverable.

The report also said that the net direct tax collection saw 87% growth at Rs 3.56 trillion as on August 12. Gross collection at Rs 4.05 trillion was 46.1% higher while refunds fell 32 %.