STT (Securities Transaction Tax) is a tax levied by the Indian government on the purchase and sale of securities through recognised stock exchanges (NSE, BSE). Rates vary by security type — for equity delivery trades it is 0.1% on both the buy and sell side.
STT and unlisted shares
Unlisted shares are exempt from STT. Because unlisted shares transfer via off-market transfer between demat accounts — not through an exchange — no STT applies to either the buyer or the seller.
What does apply to unlisted share transfers is **stamp duty** (0.015% on the transfer value), collected by the seller's depository participant.
Why it matters for tax calculations
STT payment is a qualifying condition for the concessional capital-gains tax rates that apply to listed shares (20% STCG, 12.5% LTCG under the listed-share regime). Since unlisted shares attract no STT, they are taxed under the unlisted-share regime: STCG at slab rate, LTCG at 12.5% (no indexation, post-2024).
Example: A buyer's invoice for unlisted shares showed 0.015% stamp duty charged by the DP — not STT, which is exchange-only.