NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Taxation
Which statement about Securities Transaction Tax (STT) on mutual fund units is correct?
STT applies on redemption of units of equity-oriented mutual fund schemes. It is not charged on purchase of units from the fund and not on redemption of debt scheme units, so the statement about equity redemption is correct.
- ASTT is levied on redemption of units of equity-oriented schemesCorrect
- BSTT is levied on purchase of units of all schemes
- CSTT is levied on redemption of debt scheme units
- DSTT is not levied on any mutual fund transaction
Explanation
STT is charged on redemption (sale) of units of equity-oriented mutual fund schemes, at the rate prescribed. It is not charged on purchase of units directly from the fund, nor on redemption of debt scheme units.
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