NISM Certifications · NISM-Series-VIII: Equity Derivatives · Accounting and Taxation
Securities Transaction Tax (STT) on futures is levied on which transaction?
Securities Transaction Tax on equity futures is levied only on the sale of the futures contract, charged on the traded price. The purchase side attracts no STT, and cash settlement of futures at expiry does not carry a separate STT.
- ASale of a futures contractCorrect
- BPurchase of a futures contract
- CBoth purchase and sale
- DOnly on final settlement
Explanation
STT on equity futures is charged only on the sell side, on the traded price. Purchase attracts no STT, and settlement of futures at expiry is cash and does not bear a separate STT. Hence only the sale is correct.
Did you get it right without looking?
One question tells you little. A timed set on Accounting and Taxation shows your real accuracy, how long you take and where you lose marks.
More Accounting and Taxation questions
- An investor buys 1 lot of 500 shares of a stock future at ₹200 and the exchange settles daily. Day 1 settlement price is ₹204, and Day 2 set…
- A trader earns a turnover-relevant F&O profit. For a futures trade, turnover for tax audit purposes is computed as:
- Which statement about the tax audit of an assessee trading in equity derivatives is correct under the Income-tax Act as taught in NISM-VIII?
- Under the accounting treatment for equity index futures followed by members and clients in India, the initial margin paid in cash to the cle…
- For a futures position, the initial margin paid by a client to the broker and held by the clearing corporation is accounted for by the clien…
- Under the Income-tax Act, how is a loss from trading in equity index futures and options on a recognised stock exchange generally classified…