STT collections jump 50% during April-November

With increasing volume in the stock market, collection from securities transaction tax (STT) surged 50 per cent during April 1 and November 10, data from Income Tax Department showed on Wednesday. Meanwhile, overall net direct tax collection rose by around 12 per cent.

Data showed that STT collection jumped to over ₹54,000 crore during period under consideration as against around ₹36,000 crore collected during corresponding period of FY26. Any investment or trading of equity shares, equity derivatives (futures and options), or equity-oriented funds, attracts STT per transaction. It is paid regardless of whether a trade is profitable or not, just like brokerage, GST, stamp duty, and other charges.

Data about surge in STT has come at a time, when there is strong demand to rework the STT and long-term capital gain (LTCG) to make investment in the stock market attractive.

Two industry bodies in their pre-Budget submission advocated for rate rationalisation. On Tuesday, PHDCCI suggested to the Finance Minister to abolish LTCG tax on equity investments, reduce STCG tax from 20 per cent to 10 per cent, and lower STT rates to encourage long-term investment and improve India’s capital market competitiveness. Earlier, FICCI urged the Centre to restore the LTCG tax exemption on listed securities in the Union Budget for 2027-28.

It also said that the government could raise the securities transaction tax (STT) on delivery-based trades, if required, to offset the revenue impact.

Meanwhile, corporate tax collection showed a growth of around 18 per cent. Similarly, non-corporate tax (taxes paid by individuals, HUFs, firms, association of persons, body of individuals, local authorities, artificial juridical person) rose just over 5 per cent. During April-November period, refund recorded an increase of around 26 per cent.

On target

With the current growth rate of net collections, government is hopeful of meeting the direct tax target which is ₹26.97 lakh crore. This is critical for fiscal situation, as it is estimated that central excise reduction on petrol and diesel could lower the central excise collection by around ₹1.80 lakh crore. At the same time, there is expectation that expenditure on account of fertilizer and food subsidy to go up substantially.

In such a situation, good growth of direct taxes, Custom Duty and CGST, along with the non-tax revenue, will help the government close the fiscal deficit for FY27 near the Budget Estimates.