June 20th, 2009 
Invest In India
The Indian stock market and investor have been demanding the government to abolish the Security Transaction Tax (STT). STT is the tax levied on the security transactions. It is believed that the government has been examining the options to abolish the STT for last many years. Now there is possibility of abolition of STT by the UPA government.
The Prime Minister of India and Finance Minister will take the final decision on the abolition of the STT. The Union Finance Minister, Pranab Mukherjee will present the full time budget in the Parliament. He has been holding meeting with various officials, industrials and investors over their budget expectations.
The industrialists and investors have been appealing the government for the abolition of the STT for long time. This time the government may consider their demand to abolish the tax on security transactions. There is impact of the global slowdown on Indian stock market and the market has been recovering from the clutches of the global economic crisis.
In Union Budget 2004-05, the finance minister proposed to introduce STT and according to SEBI, STT is responsible for more than 50 per cent of the total transactions cost in the Indian stock market. STT can be defined as tax on securities transaction, any change in the tax structure on equity would have high impact on the stock market.
The UPA government may go for financial reforms and the coming budget will be aimed to check the interest of investors and stock market. STT has been affecting the stock market and its volume of transactions. The abolition of the STT from Indian stock market would attract more foreign investors in and the market will cherish further. Even this may increase the inflow of the contribution by the FIIs in Indian stock market. It can be expected that the government may abolish the STT in order to benefit the stock market and investment in India. As investment and the capital formation are the best ways to protect the economy from the global slowdown.
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