On Monday, October 6, 2025, India’s Supreme Court agreed to review a petition questioning the constitutional validity of the Securities Transaction Tax (STT). This direct tax, established by the Finance Act, 2004, is applied to securities transactions conducted via a listed stock exchange.
A bench led by Justice J.B. Pardiwala formally issued notice to the Union Government, through the Ministry of Finance, regarding the petition filed by Aseem Juneja. Represented by advocate Siddhartha K. Garg, Juneja argues that the STT infringes upon fundamental rights, including the right to equality, the right to trade or earn a living, and the basic right to live with dignity.
The petition clarifies that the challenge isn’t solely based on the current high or increased taxation for stock market participants.
Instead, the petition directly questions the legality of the tax imposed in the form of STT. Firstly, it claims a violation of the principle against double taxation. Aseem Juneja, a stock market trader, highlighted that participants already pay capital gains tax on their market profits, and then face an additional STT on the very same transaction.
Secondly, Mr. Juneja asserted that STT stands out as the only tax in India levied purely on the act of conducting a profession. Crucially, it must be paid irrespective of whether a profit is made, rendering it “almost punitive or deterrent in nature.”
He further explained that while most taxes in India target year-end profits, STT applies even when a stock market trader incurs a loss. Originally introduced in 2004 to combat tax evasion in the stock market, Juneja compared STT to Tax Deducted at Source (TDS) for salaried individuals. However, unlike TDS, which is refunded or adjusted against income tax, no such provision exists for STT, forcing traders to pay both.