Securities Transaction Tax (STT) paid on Mutual Fund Units in India - FY 2013-14

Securities Transaction Tax

Equity Oriented Fund
Sale of a unit of an equity-oriented mutual fund	0.001%
Purchase of a unit of an equity-oriented mutual fund where the transaction is entered into a recognized stock exchange and the contract for sale is settled by the actual delivery	NIL
Sale of a unit of an equity-oriented mutual fund the where transaction is entered into a recognized stock exchange and the contract for sale is settled by the actual delivery	0.001%
Other than Equity-oriented Fund – Exempt from Securities Transaction Tax
Mutual Funds will also pay securities transaction tax wherever applicable on the securities bought/sold.

Securities Transaction Tax has been reduced on equity schemes and exchange traded funds to 0.001 per cent for the financial year 2013-14 from June 1, 2013.

There are three areas where the STT would come into play.

1. Buying Mutual fund units from stock exchange - units going into individual's demat account

Earlier it was 0.1% now this has been abolished (w.e.f June 1, 2013) 

2. Selling Mutual Fund Units on the stock exchanges

Earlier it was 0.1% now current rate is 0.001% (w.e.f June 1, 2013)

3. Selling Mutual Fund Units directly to fund house.

 Earlier it was 0.25% now current rate is 0.001% (w.e.f June 1, 2013). This means on a transaction of Rs 1 lakh the tax will be just Re 1.