Finance Minister P Chidambaram, on Friday, proposed changes in the Securities Transaction Tax (STT), which will now be treated like any other deductible expenditure against business income.

The finance minister proposed that in case of sale of an option in securities, the levy of STT would be only on the option premium where the option is not exercised and the liability would be on the seller. STT would be levied at the rate of 0.017 per cent of the option premium and shall be paid by the seller.

However, where the option is exercised, the levy would be on settlement price and the liability would be on the buyer. STT on such transaction would be levied at the rate of 0.125 per cent of settlement price and would be paid by the purchaser. In case of the sale of a future in securities, STT would be levied at 0.017 per cent and is to be paid by the seller.