AAA series: A day , An Abbreviation : STT

STT :
Securities Transaction Tax.

This is the tax introduced in the Indian Markets by Finance Minister Chidambaram when presenting the budget in 2004.

Every transaction in securities in a recognized stock exchange in India like BSE,NSE etc , would attract a turnover tax called STT. Only buyers need to pay this tax. STT initially is set at 0.15%

Its introduced with a view to
1.To slow down the flow of speculative money, as it would be taxed each time a transaction takes place
2.To curb purely short-term speculation by day traders, “noise traders,” arbitrageurs and big operators
3.To reduce the speculation in Indian financial markets, which are amongst the most speculative markets in the world