CTT, short for Commodity Transaction Tax got introduced in Budget 2013 is meant to reduce speculative trading in non agri commodity as there is no difference in derivatives trading of equity and commodity.
Here are the highlights of the proposed tax:
1. CTT applicable only to non-agri commodities trading in futures such as metals, oil etc
2. The tax rate is same as that of STT in equity futures which is 0.01%
3. CTT will be refunded to business if income from commodity derivatives trading is shown as business income.
CTT is expected to lower the speculative trading in non-agri commodities.