Commodities Transaction Tax

Introduced by the Finance Act 2013 at 0.01 per cent to bring parity with STT, and extended to options on futures by the Finance Act 2018.

This one is not written up yet

The definition above is the short version. A full explanation — how it works, a worked example and the exam traps — is still being written. In the meantime the chapter below covers it in context.

Written up from the same chapter

Fair valueThe theoretical futures price — spot plus the cost of carrying the commodity to expiry — at which a buyer is indifferent between buying today and buying forward.

Where this is taught

Series XVI · Chapter 9: Accounting and Taxation

Free preparation for NISM Series XVI

Related terms

Commodity Transaction TaxA transaction tax on non-agricultural commodity derivatives — 0.01% on the sale of a futures contract, paid by the seller, with separate rates for options.

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