n NISM Certifications
X NISM Series X
Medium

The buyer of an option of a security is required to pay Securities Transaction Tax (STT) when the option is exercised, and this applies specifically to the sale of an option in securities.

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    True

  2. False

    Correct answer

Why this is the answer

The purchaser has to pay the STT in case of a sale of an option in securities, where the option is exercised, not merely upon exercise itself.

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