There is so many people do not declare/ announce their profit and avoid paying capital gain tax, as government can only tax those profits, which have been declared by people. To fight with this situation Government has introduced STT (Securities Transaction Tax) which is applicable on every transaction done at stock exchange. This tax is payable whether you buy or sell a share and gets added to the price during the transaction itself. That means if you buy or sell equity shares, derivative instruments, equity oriented Mutual Funds this tax is applicable. This tax is added to the price of security during the transaction itself, hence you cannot avoid (save) it. As this tax amount is very low people do not notice it much.

A few years ago, the securities transaction tax (STT) was introduced in India, to stop tax avoidance of capital gains tax by the Indian people. Earlier, many people usually didn't declare their profits on the sale of stocks and avoided paying capital gains tax. The government could tax only those profits, which have been declared by people in their own income tax.

The securities transaction tax (STT) Transactions in stock, index options and futures would also be subject to transaction tax. This tax is payable whether you buy or sell a share and gets added to the price of the stock at the time the transaction is made. Since brokers have to automatically add this tax to the transaction price, there is no way to avoid it.