Quick Answer

STT (Securities Transaction Tax) and CTT (Commodities Transaction Tax) are government taxes levied on every trade you make on Indian stock and commodity exchanges. STT applies to equity shares, equity futures, and equity options. CTT applies to non-agricultural commodity futures and options like gold, crude oil, and copper. Your broker deducts these taxes automatically at settlement, so you never pay them separately.

What Is STT and CTT Charges?
How to Calculate STT on Your Trade
How STT and CTT Work (Step by Step)
Practical Example With Numbers
Key Features of STT and CTT
Advantages
Risks and Limitations
Tips for Beginners
STT vs CTT: A Side-by-Side Comparison
Common Mistakes to Avoid
Who Should Care About STT and CTT?
Conclusion
Frequently Asked Questions

Rohit bought 50 shares of a company at ₹800 each for delivery. A week later, he sold all 50 at ₹850. On paper, his profit was ₹2,500. But when he checked his contract note, the actual profit was closer to ₹2,350. The missing ₹150 was not brokerage. It was STT, plus exchange charges and GST.

If you have ever opened your trade statement and wondered why your profit does not match your simple calculation, STT and CTT are usually the reason. These are government taxes charged on every trade you place, deducted automatically by your broker. STT is for shares, equity derivatives, and mutual fund units, whereas CTT is for non-agricultural commodity derivatives such as gold, crude oil, and copper. Understanding these charges will help you arrive at your real cost of trading and will also help you avoid surprises when you check your brokerage calculator.

What Is STT and CTT Charges?

STT, or Securities Transaction Tax, is a direct tax charged on the purchase or sale of securities listed on recognised Indian stock exchanges like the NSE and BSE. CTT, or Commodities Transaction Tax, is a similar tax charged on trades in non-agricultural commodity derivatives on exchanges like MCX.

Both taxes were introduced to bring transparency to market transactions and to generate government revenue directly from trading activity, rather than relying only on capital gains tax collected later. STT was introduced in 2004 under the Securities Transaction Tax Act, and CTT followed in 2013 under the Finance Act. Neither tax depends on whether you make a profit or loss; you pay it simply because you executed a trade.

Think of it this way: brokerage is the fee your broker charges for the service, while STT and CTT are fees the government charges for using the exchange. Your broker collects these taxes on behalf of the government and passes them on, so they always show up in your contract note, no matter which broker you use.

How to Calculate STT on Your Trade

The calculation is straightforward:

Tax Amount = Transaction Value × Applicable Rate

For equity delivery trades, transaction value is price multiplied by quantity. For options, it is the premium amount, not the strike price or lot value. For futures, it is the futures price multiplied by lot size.

Example: You sell 1 lot of Nifty 50 futures at 22,000. Lot size is 50. Transaction value = 22,000 × 50 = ₹11,00,000. STT at 0.05% = ₹550.

For options: You sell 1 lot of a call option at a premium of ₹120. Lot size is 50. Premium value = 120 × 50 = ₹6,000. STT at 0.15% = ₹9.

Options traders have lower STT as tax is on premium and not contract value.

How STT and CTT Work (Step by Step)

Here is what actually happens behind the scenes when your order gets executed:

You place a trade. This could be buying shares, selling equity futures, writing an options contract, or trading a commodity future on MCX.
The exchange matches your order. Once your buy or sell order is executed, the exchange records the transaction value, which is the price multiplied by quantity or the premium value in the case of options.
The tax rate is charged automatically. Depending on the type of trade (delivery, intraday, futures or options), a fixed percentage is charged on the transaction value. This rate is decided by the government and updated through the Union Budget, and not by your broker.
The tax is deducted at settlement. Your broker calculates the exact STT or CTT amount and deducts it before the final settlement amount is reflected in your trading or demat account.
It appears on your contract note. Every trade you make generates a contract note showing brokerage, STT or CTT, exchange transaction charges, GST, and stamp duty separately, so you can verify exactly what you paid.

Current STT Rates in India (Effective April 1, 2026)

Transaction Type	STT Rate	Charged To
Equity delivery (buy)	0.1%	Buyer
Equity delivery (sell)	0.1%	Seller
Equity intraday (sell only)	0.025%	Seller
Equity futures (sell only)	0.05%	Seller
Equity options, sale of option (on premium)	0.15%	Seller
Equity options, on exercise (intrinsic value)	0.15%	Buyer
Sale of equity-oriented mutual fund units	0.001%	Seller

These rates were revised upward as part of Budget 2026, with STT on futures rising from 0.02% to 0.05%, and STT on options premiums rising from 0.10% to 0.15%. STT on exercised options also rose from 0.125% to 0.15%.

Current CTT Rates in India

Transaction Type	CTT Rate	Charged To
Sale of non-agricultural commodity futures	0.01%	Seller
Sale of commodity option (on premium)	0.05%	Seller
Commodity option exercised into delivery	0.0001%	Buyer
Commodity option exercised, cash settled	0.125%	Buyer

CTT applies only to non-agricultural commodities such as gold, silver, crude oil, natural gas, copper, and other metals. Agricultural commodities like wheat, cotton, guar seed, turmeric, and cardamom are fully exempt from CTT.

Practical Example With Numbers

Say you buy 100 shares of a company at ₹500 each for delivery, and later sell all 100 shares at ₹550.

Buy leg: Transaction value = 100 × ₹500 = ₹50,000. STT at 0.1% = ₹50.

Sell leg: Transaction value = 100 × ₹550 = ₹55,000. STT at 0.1% = ₹55.

Total STT paid across both legs = ₹105, even before accounting for brokerage, exchange charges, and GST.

Now compare this with an intraday trade of the same size. If you buy and sell the same 100 shares on the same day, STT is charged only on the sell side at 0.025%. On a sell value of ₹55,000, that works out to just ₹13.75, much lower than the delivery trade because intraday STT applies only once and at a lower rate.

For a commodity trade, imagine you sell one lot of crude oil futures worth ₹6,00,000. CTT at 0.01% comes to ₹60. If instead you sold a crude oil options contract with a premium value of ₹15,000, CTT at 0.05% on the premium would be ₹7.50.

Key Features of STT and CTT

Automatic deduction: You don’t have to manually pay any tax; your broker deducts it automatically at the time of settlement.
Rate depends on type of trade: Delivery, intraday, futures, and options all have different rates.
No profit or loss condition: You pay STT or CTT irrespective of whether the trade is profitable or not.
Government-set rates: Rates change only through Budget announcements and not broker discretion.
Segment-specific: STT is applicable on equity and equity derivatives, while CTT is applicable on non-agricultural commodity derivatives.
On Contract Notes: The exact STT or CTT charged is mentioned in every trade statement, which helps with transparency and tax filing.

Advantages

Knowing your STT and CTT charges gives you a better understanding of your actual trading cost, which is especially important for intraday and options traders who place a lot of trades in a day. It also helps in tax filing, as STT paid on equity delivery trades is included in your capital gains calculation under Indian income tax rules.
For active traders, understanding these charges helps in choosing the right strategy. For instance, as intraday STT is less than delivery STT, frequent traders sometimes consider this difference in their cost planning while choosing between intraday and delivery positions via platforms like the Alice Blue trading account.

Risks and Limitations

The biggest risk with STT and CTT is that their total impact can be underestimated, especially by high-frequency traders. A trader may not notice ₹10 to ₹15 STT per trade when he places 20 intraday trades a day, but they can add up significantly over a month.
Options sellers often forget that STT applies to the premium value as well, even if the option expires worthless, which means you still pay tax on a losing trade. Similarly, commodity traders sometimes forget that CTT does not apply to agricultural commodities, which can create confusion when comparing cost sheets across different commodity segments.
Some amateur traders try to avoid these charges by overtrading in segments with lower tax rates without proper risk assessment, which can lead to bad decision-making driven by tax optimization rather than good strategy.

Tips for Beginners

Always check your contract note after every trade to see the exact STT or CTT deducted, rather than estimating it yourself.
Use a brokerage and charges calculator before placing large trades to know your total cost upfront.
Remember that STT on options is charged on premium value, not the lot size or strike price.
Do not choose a trading segment purely because it has a lower STT or CTT rate; base your decision on strategy and risk first.
If you trade commodities, check whether your instrument is agricultural or non-agricultural, since only non-agricultural commodities attract CTT.
Keep your annual STT paid handy during tax filing season, as it is relevant for capital gains reporting.

STT vs CTT: A Side-by-Side Comparison

Parameter	STT	CTT
Full form	Securities Transaction Tax	Commodities Transaction Tax
Applies to	Equity shares, equity futures, equity options, equity mutual funds	Non-agricultural commodity futures and options
Introduced in	2004	2013
Exempted segment	None for listed equity	Agricultural commodities
Typical rate range	0.001% to 0.15%	0.0001% to 0.05%
Collected by	Stock exchanges (NSE, BSE)	Commodity exchanges (MCX)
Charged on	Transaction value or premium	Transaction value or premium

Common Mistakes to Avoid

Confusing STT with brokerage: STT is a government tax, while brokerage is your broker’s service fee. They are calculated separately and shown as separate lines in your contract note.
Not paying STT on options that expire worthless: A common mistake made by beginners is ignoring tax if the option is not profitable. However, STT is charged on the premium whether the option is profitable or not.
Avoid CTT exemption for agricultural commodities: There’s no CTT when trading wheat or cotton futures, so don’t add this tax unnecessarily to your cost calculations.
Not updating revised rates after the Budget announcements. For example, STT and CTT rates are subject to periodic changes. Using outdated data to project costs can lead to incorrect profit calculations.
Assuming tax is refundable on losses: STT and CTT are non-refundable irrespective of the fact whether your trade is in profit or loss.

Who Should Care About STT and CTT?

Every trader and investor in the Indian stock market deals with STT, whether they are buying their first share for long term investing or actively trading intraday equity and futures and options. Active F&O traders and high-frequency intraday traders should pay closer attention, since these charges accumulate quickly with trade volume.

Investors who only buy and hold shares for the long term will notice STT mainly at the time of purchase and eventual sale, making it a smaller part of their overall cost. Commodity traders using MCX trading accounts need to track CTT separately, especially if they trade both agricultural and non-agricultural commodities, since the tax treatment differs.

Conclusion

STT and CTT charges are unavoidable parts of trading in India, applied automatically by exchanges on every stock, derivative, and commodity transaction. STT covers equity and equity derivatives, while CTT covers non-agricultural commodities, and both were revised upward from April 2026 as per Budget announcements. Knowing the exact rate for your trade type, whether delivery, intraday, futures, or options, helps you calculate real costs and avoid confusion during tax filing. Before your next trade, check which STT slab applies to it, and factor these taxes into your overall cost calculation before placing any new trading account order.