STT charges at FNO expiry

[jaywings007]

.No. Taxable securities transaction New rate from
01.06.2008 Payable by
A B C D
a Sale of an option in securities 0.017 per cent Seller
a Sale of an option in securities 0.017 per cent Seller
b Sale of an option in securities, where option is exercised 0.125 per cent Purchaser
c Sale of a futures in securities 0.017 per cent Seller


Its like that...

But STT is applicable on (strik price+premium) or only on premium?

 

[trader.trends]

From NSE site: Home > NSCCL > Clearing & Settlement > Derivatives > Securities Transaction Tax
Securities Transaction Tax

STT Computation
As per the Finance Act 2004, and modified by Finance Act 2008 (18 of 2008) STT on the transactions executed on the Exchange shall be as under:

Sr.No. Taxable securities transaction New rate from
01.06.2008 Payable by
A B C D
a Sale of an option in securities 0.017 per cent Seller
a Sale of an option in securities 0.017 per cent Seller
b Sale of an option in securities, where option is exercised 0.125 per cent Purchaser
c Sale of a futures in securities 0.017 per cent Seller

1. Value of taxable securities transaction relating to an option in securities shall be the option premium, in case of sale of an option in securities.


2. Value of taxable securities transaction relating to an option in securities shall be the settlement price, in case of sale of an option in securities, where option is exercised.

The following procedure is adopted by the Exchange in respect of the calculation and collection of STT:

1. STT is applicable on all sell transactions for both futures and option contracts.
2. For the purpose of STT, each futures trade is valued at the actual traded price and option trade is valued at premium. On this value, the STT rate as prescribed is applied to determine the STT liability. In case of voluntary or final exercise of an option contract STT is levied on settlement price on the day of exercise if the option contract is in the money.
3. STT payable by the clearing member is the sum total of STT payable by all trading members clearing under him. The trading members liability is the aggregate STT liability of clients trading through him.

 

[sivacools]

hi bunny,

if u buy an option and sell it anytime within the settlement, u pay absolutely no stt on the buy side and rs. 1700 per crore as stt on just the premium value on the sell side.
whereas if u buy an option and hold it till settlement.
1. if it expires out of money, again u pay no stt.
2. in case it expires in the money u have 2 pay stt calculated at rs. 12500 rs. per crore on the premium value + the UNDERLYING VALUE.

now plz dont ask me how I got to know this, am still licking my wounds.

Ill tell u sumthing very interesting , watch it on the next settlement day. for instance the nifty is trading at 5200 2 hours before expiry,logically the 5100 call should be trading at rs 100, otherwise u get a risk free arbitrage oppertunity.(u buy the call and sell the futures. both have to expire at the same rate) but u will find that atleast one of the two, 5100 call or 5300 put, or both would be trading at least 3- 4 rs discount from the nifty.

regards
Anurag

Hi Anurag,

Thanks for the information. But will it be applicable for currency options too?

Regards
Siva