The FM has rationalised this by saying it needs to be equal to dividend distribution tax, and to promote longer term investing.
Securities Transaction Tax is no longer an advance tax, it’s a set off against income, as a business expense. Doesn’t affect the salaried, only those that file business income returns.
On the lines of STT, a tax called Commodities Transaction Tax will be paid by commodity traders
Earlier, these services were out of the service tax net. Now they’re in. Meaning you will probably need to pay a wee bit more on your transactions on stock exchanges. And please, for heaven’s sake, don’t buy ULIPs.
I don’t know who ever paid this tax, but they don’t have to pay it any more. So withdraw as much cash as you like. Just make sure it’s in your account first.
Nice for small companies like ours or for startups who are renting offices for less than 10 lakhs a year. You don’t need to pay service tax until your turnover crosses Rs. 10 lakhs.
If you pay it for your parents.