Ch.8 · Dividend and STT Taxation · hard
What is 'STT' (Securities Transaction Tax) on mutual fund redemptions?
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EXPLANATION
Securities Transaction Tax (STT) is charged at 0.001% on the redemption/repurchase of equity-oriented mutual fund units (on the NAV-based redemption value). STT payment by the scheme is a prerequisite for the concessional capital gains tax rates (STCG at 15%, LTCG at 12.5%) that apply to equity funds. Without STT, gains would be taxed at slab rates.
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