Veteran investor Vijay Kedia has called for the abolition of the Securities Transaction Tax (STT), arguing that Indian investors are already burdened with multiple statutory and regulatory charges while participating in the country’s capital markets. Kedia shared his views in a post on X on Thursday, where he described STT as an “additional layer of taxation” that no longer serves the purpose for which it was originally introduced. His remarks come amid continuing discussions over taxation policies affecting equity investors in India.

Kedia said STT was initially introduced in 2004 as a simplified transaction tax intended to make tax collection from capital market transactions easier and more transparent. However, he argued that the market ecosystem has evolved significantly over the years and that the levy has effectively become an extra tax imposed alongside several other mandatory charges. According to him, investors today already pay brokerage fees, exchange transaction charges, Goods and Services Tax (GST) on transaction-related costs, SEBI turnover fees, and stamp duty in addition to STT.

Highlighting the financial impact on market participants, Kedia noted that STT is payable irrespective of whether an investor earns a profit or incurs a loss. He said that unlike income tax, which is linked to earnings, STT is charged simply for participating in the market. Kedia suggested that this structure increases the overall cost of investing and trading, especially for retail investors who actively participate in equities over the long term. He added that such costs may discourage broader market participation.

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The investor further stated that India’s equity markets have matured considerably since STT was first implemented more than two decades ago. According to him, the government should now reassess the relevance of the tax in the context of a rapidly expanding and increasingly sophisticated financial market. Kedia argued that simplifying the taxation structure in capital markets could improve efficiency and make investing more attractive for a larger segment of the population, particularly new retail investors entering the market.

Kedia also emphasized the wider economic role played by capital markets in supporting the country’s growth. He said equity markets help channel household savings into productive businesses, encourage entrepreneurship, generate employment opportunities, and contribute to long-term economic development. In his view, reducing transaction-related tax burdens could strengthen investor confidence and improve participation in India’s financial growth story, ultimately benefiting both companies and investors alike.

The comments form part of a broader set of suggestions recently shared by Kedia on measures aimed at strengthening India’s capital markets. The debate around equity taxation has intensified in recent years following revisions to long-term capital gains (LTCG) tax rules and growing concerns among investors regarding rising transaction costs. While no official response has been issued regarding Kedia’s proposal, his remarks have once again brought attention to the ongoing discussion over balancing government revenue collection with the need to encourage greater retail participation in the stock market.

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