NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Taxation (NISM XXI-A)
Which of the following is generally true of the securities transaction tax (STT) on delivery-based sale of listed equity shares by a PMS client's portfolio?
STT is levied on both the purchase and the sale of delivery-based listed equity shares. It applies to the transaction value on each side and not to the portfolio manager's fee, and it is not waived for PMS portfolios.
- ASTT is levied on both purchase and sale of delivery-based equityCorrect
- BSTT is levied only on purchase
- CSTT is not levied on equity delivery transactions at all
- DSTT is levied only on the portfolio manager's fee
Explanation
On delivery-based trades in listed equity, STT is charged on both the buy and the sell side. It is a transaction-level levy and is not charged on the management fee, so the other options are wrong.
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