STT is a tax the government charges on the value of securities you buy or sell on a recognised stock exchange. It’s collected automatically by your broker and shown on your contract note.
You don’t file it separately or pay it yourself. Every time you trade shares or derivatives, the applicable STT is deducted. Rates differ by segment: delivery equity, intraday equity, futures and options are each taxed differently.
For derivatives, the rates changed recently. As of October 2026, after Budget 2026 changes effective 1 April 2026:
- Options (on sale): 0.15% of the option premium
- Futures: 0.05%
- Options exercised: 0.15%
Before that, from 1 October 2024, the rates were 0.1% on options sale and 0.02% on futures. Tax rates change with budgets, so check the latest notification before calculating.
A quick example: an options trader sells options with a total premium of ₹1,00,000 in a day. At 0.15%, STT on that is ₹150. That sounds small, but someone who trades heavily every day can pay a big amount over a year, whether they make money or not.
STT is a cost of trading, not an income tax. Your profits are taxed separately, so speak to a CA for your own situation.
Trading costs and how they eat into returns are covered in our Diploma in Stock Market.