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About STT:
- Introduced: In 2004, by then Finance Minister P. Chidambaram to curb tax evasion and bring transparency to stock market transactions.
- Administered by: The Central Board of Direct Taxes (CBDT).
- Nature: It is a direct tax levied on every purchase and sale of securities (shares, derivatives, equity mutual funds) executed through recognised stock exchanges in India.
- Purpose:
- To replace the earlier complex system of tracking and taxing capital market income.
- To ensure traceability of market transactions and curb tax avoidance.
- Collection: The stock exchanges collect STT from investors and remit it to the government.
Why in News?
 The Supreme Court of India has decided to hear a petition challenging the constitutional validity of the Securities Transaction Tax (STT) imposed under the Finance Act, 2004.
