Q. Consider the following statements regarding “Securities Transaction Tax”:
1.It is an indirect tax.
2.It is a type of financial transaction tax levied in India on transactions done on the domestic stock exchanges.
Which of the statements given above is/are not correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: A
Notes:

Explanation: The Securities Transaction Tax (STT) is a type of ‘financial transaction tax’ levied in India on transactions done on the domestic stock exchanges.

  • The rates of STT are prescribed by the central government through its budget from time to time.
  • In tax parlance, this is categorized as a direct tax. The tax came into effect from 1 October 2004.

Source: Ramesh Singh

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