More Stories

Informist, Monday, Oct. 6, 2025

 

NEW DELHI – The Supreme Court on Monday issued a notice to the Centre on a petition challenging the constitutional validity of the securities transaction tax and listed the case for hearing on Nov. 7. The securities transaction tax is a direct tax levied on the purchase and sale of securities transacted on a recognized stock exchange in India.

 

Aseem Juneja, the petitioner, said the securities transaction tax violated the right to equality, right to trade or earn a livelihood and the basic right to live with dignity under the Constitution. The petitioner said the challenge to securities transaction tax was not because the taxation on the stock market participants had increased or taxation was currently high. Instead, it questions the legality of tax imposed in the form of securities transaction tax, the petitioner added.

 

The securities transaction tax violates the principle of double taxation as a stock market trader has to pay capital gains tax on the profit made in the market and also has to pay securities transaction tax, over and above this capital gains tax already paid on the same transaction. The securities transaction tax was the only tax in India which was imposed on the sheer act of carrying out a profession and has to be paid irrespective of whether there is a profit made or not, which makes it almost punitive or deterrent in nature, said the petitioner. Every tax in India is on the profit at the year-end, but the securities transaction tax is applicable even if the stock market trader was operating in a loss, the petitioner added.

 

"STT (securities transaction tax) was introduced in 2004 to combat tax evasion in the stock market. This means that STT to stock market participants is what TDS (tax deduced at source) is to salaried individuals. But the problem is that the TDS is refunded at the end of the year or adjusted with the income tax but no such provision is made for STT and the trader has to pay both," said the petitioner.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.