STT collections to cross $190.04 Mn : Government

By SiliconIndia   |   Wednesday, 26 December 2007, 08:00 Hrs
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New Delhi: Government expects to reap rich dividends from the high volatility in the stock market with total security transaction tax (STT) likely to touch $190.04 million ( Rs 7,500 crore) in the current fiscal.

"Thanks to the action in the stock market, STT collections rose nearly 75 per cent to $149.69 million (5,895 crore) till December 15 this year, and are expected to touch $190.04 million (Rs 7,500 crore) in 2007-08," said a senior Finance Ministry official .

Finance Minister P Chidambaram had introduced STT in the Union Budget 2004-05. All investors in the stock market has to pay a fixed STT of 0.125 percent for every transaction in cash for delivery of shares. However, transactions in derivatives trading attract 0.017 per cent tax.

Increase in corporate tax and personal income tax mop-up has been attributed to steady economic growth and rise in salaries of the middle class, STT collections have largely gone up due to increase in daily trading at the present high level, the official said.

STT collections registered a growth of 57.61 percent and stood at Rs 3,783 crore,during April- October period. The ministry is expecting that with high volatility continuing in the stock Markets, the trading volumes may go up further in the last quarter, adding more to the exchequer.

The average daily trading at the BSE and NSE has gone up to about Rs 20,000 crore, including about Rs 14,000 crore at NSE. The 30-share Sensex of BSE touched 19,854 points on December 24, rising from 5,694 points on April 1 this year.

Similarly, the 50-share Nifty of NSE stood at 5,985 points on December 24 as against 3,633 points on the first day of this fiscal. The BSE Sensex has crossed 20,000 mark and Nifty surpassed 6,000 mark since then.

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