Supreme Court decides to look at constitutional validity of Securities Transaction Tax

The Supreme Court of India on Monday (October 6, 2025) determined to look at a plea difficult the constitutional validity of the Securities Transaction Tax (STT), a direct tax levied on securities transactions by means of a listed inventory change, as imposed beneath the Finance Act, 2004.

A Bench headed by Justice J.B. Pardiwala issued formal discover to the Union Government, by means of the Ministry of Finance, on the petition filed by Aseem Juneja, represented by advocate Siddhartha Okay. Garg, who contended that the STT violated basic rights to equality and to commerce or earn a livelihood and the essential proper to reside with dignity.

The petition clarified that the problem to the STT was not as a result of the taxation on the inventory market individuals had elevated or that the taxation was at present excessive.

“The present petition is as an alternative questioning the legality of the tax imposed within the type of STT… Firstly, it violates the precept of double taxation because the petitioner (a inventory market dealer) pays capital beneficial properties tax on the revenue made out there after which additionally has to pay STT, over and above this capital beneficial properties tax already paid on the identical transaction,” the plea submitted.

Secondly, Mr. Juneja contended that STT was the one tax in India which was imposed on the “sheer act of finishing up a occupation and must be paid no matter whether or not there’s a revenue made or not, which makes it virtually punitive or deterrent in nature.”

“Every tax in India is on the revenue on the year-end however STT is relevant even when the inventory market dealer is working in a loss. STT was launched in 2004 to fight tax evasion within the inventory market. This implies that STT to inventory market individuals is what TDS is to salaried people. But the issue is that the TDS is refunded on the finish of the 12 months or adjusted with the earnings tax however no such provision is made for STT and the dealer has to pay each,” the petition famous.