Supreme Court decides to examine constitutional validity of Securities Transaction Tax

The Supreme Court of India on Monday (October 6, 2025) decided to investigate a petition challenging the constitutional validity of the Securities Transaction Tax (STT), a direct tax levied on securities transactions through a listed stock exchange, as imposed under the Finance Act, 2004.

Advocate Siddharth, a bench headed by Justice JB Pardwala through the Finance Ministry, through the Finance Ministry, on the petition filed by ASEM Juneja. A formal notice was issued on the petition represented by Garg, who said that the STT had violated fundamental rights for equality and acquired basic rights and fundamental rights to live with business.

The petition clarified that the STT was not challenged as there was an increase in taxation on the participants of the stock market or at present.

“The current petition is questioning the validity of the tax levied as STT … First, it violates the principle of double taxation as the petitioner (a stock market merchant) pays the capital profit tax on the benefits made in the market and then has to pay this capital profit in advance,” This capital profit tax is already paid. ,

Secondly, Mr. Juneja said that STT was the only tax in India, which was “levied on the sheer act to carry out a profession and despite this it should be paid whether a profit has been earned or not, which makes it almost punitive or preventive in nature.”

“Each tax in India is at profit at the end of the year, but the STT is applied, even though the stock market trader is working in a loss. STT was introduced to compete in the stock market in 2004. This means what STT has to do for the stock market participants for salary persons. The petition noted.