Impact of Securities Transaction Tax on Select Top 10 Companies Listed in Nifty 50 Index in National Stock Exchange of India

Since, capital gain taxes (CGT) has been reassigned to the stock exchanges, the waive State has been experiencing the erosion of tax base and immoral taxes. Hence, the implementation of Securities Transaction Tax (STT) in the Indian fiscal market in 2004 overlayed CGT. STT is the tax payable by both the buyer and seller at the time of buying and selling of securities. Compared to CGT, STT does not make any dissimilarity amidst short-term capital gains and long-term capital gains realizations. The study is empirical in nature. The paper has used secondary data of select top 10 companies listed in NIFTY 50 Index. Error Correction Model (ECM) model used in the analysis is found to be viable in the long run and the stability test proves that the model is desirable and stable in the long run of the analysis between the variables and STT. Hence, it was concluded that single-handedly STT cannot solve all the tribulations interconnected to the financial markets but can stalwartly make a distinction to those fretful traders about the stability of the financial market in the long-run.