Equity markets get tax push

Investing in stocks will be cheaper now with Finance Minister P Chidambaram proposing a cut in the securities transaction tax, or STT. He proposed to make the following reductions in the rates of tax:

Equity futures: from 0.017% to 0.01 percent

MF/ETF redemptions at fund counters:  from 0.25 to 0.001 percent

MF/ETF purchase/sale on exchanges:   from 0.1 to 0.001 percent, only on the seller

He also proposed to introduce Commodities Transaction Tax (CTT) on non-agricultural commodities futures contracts at the same rate as on equity futures, that is, at 0.01 percent of the price of the trade. Trading in commodity derivatives will not be considered as a 'speculative transaction' and CTT shall be allowed as deduction if the income from such transaction forms part of business income. Agricultural commodities will be exempt.