The Government expects to garner Rs 7,500 crore from the securities transaction tax (STT) likely during the current financial year.
Due to the action in the stock market, STT collections rose nearly 75 per cent to Rs 5,895 crore till December 15 this year, and is expected to touch Rs 7,500 crore in 2007-08, sources said.
The Finance Minister, Mr P. Chidambaram, had introduced STT in the 2004-05 Budget.
Rate of pay
All the investors in the stock market pay a fixed STT of 0.125 per cent for every transaction in cash for delivery of shares.
However, transactions in derivatives trading attract 0.017 per cent tax.
While increase in corporate tax and personal income tax mop-up has been attributed to steady economic growth and rise in salaries of the middle class, STT collections have largely gone up due to increase in daily trading at the present high level, the source added.
During April-October period, STT collections registered a growth of 57.61 per cent and stood at Rs 3,783 crore.