Securities Transaction Tax is applicable on purchase or sale of equity shares, derivatives, equity oriented funds and equity oriented mutual funds.
The government will reduce taxes levied on various transactions in the securities market, a move that will help in bringing down the overall cost for investors.
The government on Friday proposed hiking the securities transaction tax on Futures & Options (F&O) contracts, a move that will increase the trading costs in the derivatives segment as well as help in curbing excessive trades. In the Finance Bill 2023, passed by the Lok Sabha on Friday, the Securities Transaction Tax (STT) on options is proposed to be increased to 0.0625 per cent from 0.05 per cent and on futures contracts to 0.0125 from 0.01 per cent. Analysts opined that higher STT will shore up the government's revenues to some extent and also discourage excessive trading since a large number of retail traders are losing money in the segment.
The FM also said the government has proposed a joint panel of Corporate Affairs Ministry and CBDT for incorporation of income computation and disclosure standards.
Finance Minister Nirmala Sitharaman on Tuesday said the securities transaction tax (STT) will be increased on futures and options (F&O) trade from October 1 to discourage retail investors from investing in the risky instrument.
Securities Transaction Tax (STT) reduced on cash delivery transactions by 20 per cent from 0.125 per cent to 0.1 per cent on cash delivery transactions.
The Union government's revenue from securities transaction tax (STT) is on track to exceed its Budget projection for the current fiscal year, with the mop-up already surpassing 50 per cent of the annual estimate. Provisional figures reveal that the Centre has collected approximately Rs 14,000 crore in the first half of this fiscal year up to September, according to a government official. This amount exceeds half of the full-year target of Rs 27,625 crore set for FY24.
What items did Finance Minister Nirmala Sitharaman make costlier?
Benchmark stock indices Sensex and Nifty dived sharply by nearly 2 per cent on Sunday after Finance Minister Nirmala Sitharaman proposed a hike in the Securities Transaction Tax (STT) on derivatives. Reversing the early gains, the 30-share BSE Sensex plunged sharply by 2,370.36 points or 2.88 per cent to slide below the 80,000-mark at 79,899.42 in afternoon trade as the finance minister announced a hike in STT on futures contracts to 0.05 per cent from the current 0.02 per cent.
CA Sumeet Mehta analyses the Union Budget 2026-2027, identifying key positives and negatives.
Net direct tax collection grew about 8.82 per cent to over Rs 18.38 lakh crore in the current fiscal till January 11 due to slower refunds and better corporate tax mop-up.
Shares of brokerage-related companies nosedived 18 per cent on Sunday after Finance Minister Nirmala Sitharaman proposed raising securities transaction tax on commodity futures to 0.05 per cent from 0.02 per cent in the Union Budget 2026-27.
A N Shanbhag explains various issues related to the Securities Transaction Tax
The proposal to impose a transaction tax on all securities at the uniform rate of 0.15 per cent has been rolled back.
Net direct tax collection grew 8 per cent to over Rs 17.04 lakh crore this fiscal till December 17 on slower refunds and higher advance taxes from corporates, the income tax department data showed on Friday.
Sectors throw up a wishlist for the Finance Minister.
This Budget positions India's taxation ideology as not merely a revenue source but as a strategic catalyst for growth, inclusion and long-term confidence.
The Securities Transaction Tax regime covering shares as well as mutual funds has come into effect from October 1.
Ambareesh Baliga's quick take on the markets after the increase in STT on futures and options trading...
Foreign Portfolio Investors (FPIs) remained in a selling mode in January, withdrawing nearly Rs 36,000 crore (about $3.97 billion) as global uncertainties persisted. Meanwhile, a higher securities transaction tax (STT) proposed in the Union Budget may weigh on overseas investor participation in the near future.
Finance Minister Nirmala Sitharaman on Sunday announced an increase in the Securities Transaction Tax (STT) on Futures and Options trade with a view to discouraging small investors from speculative trading in derivatives, which led to a sharp decline in the stock market.
The Budget emerges as a measured, credible and forward-looking policy document that reinforces India's commitment to remaining a stable, reform-oriented economy amid an increasingly fragmented global landscape, says A Balasubramanian.
The market capitalisation of BSE-listed companies eroded by Rs 9,40,581.75 crore to Rs 4,50,61,658.60 crore (USD 4.90 trillion) in a single day.
The economy overall was bleak last year with sticky inflation forcing the RBI to raise the interest rates aggressively.
Budget 2026 sticks to fiscal discipline, shuns populist measures despite five key state elections coming up, but ends up rattling stock markets with a higher transaction tax on derivatives trading.
'Global uncertainty is something which definitely occupies the minds of officials when we are preparing for the Budget.'
Bharat Electronics, Reliance Industries, Mahindra & Mahindra, Larsen & Toubro, InterGlobe Aviation, ICICI Bank and UltraTech Cement were among the other major gainers. Axis Bank, Infosys, Tata Consultancy Services, Trent and Titan were the laggards.
'When markets go into a budget with excessive optimism, the risk of disappointment is higher.'
Sometimes, the most powerful Budgets whisper and the wisest investors listen, notes Ramalingam Kalirajan.
'Given that India underperformed emerging markets by 28 per cent in 2025, the worst performance in over 30 years, the timing of the sharp STT hike could have been better.'
The deduction of Securities Transaction Tax on trade in equities will come into force in major bourses from October 1.
Capex, infrastructure development, and prudent fiscal management are the key focus areas in the Budget, says Nilesh Shah.
Net direct tax collection dipped 3.95 per cent to Rs 6.64 lakh crore so far this fiscal, mainly on account on higher refunds, according to government data released on Tuesday. Direct tax includes taxes on income paid by companies, individuals, and by professionals, and other entities.
In the 15 Union Budget presentation days of the Narendra Modi government since it came to power in 2014, the BSE benchmark Sensex has ended in negative territory eight times.
Finance Minister P Chidambaram on Wednesday exempted bonds from the new transaction tax and reduced the levy on day traders and arbitrageurs from 0.15 per cent to 0.1 per cent.
The Union Budget for 2026-27, presented by Finance Minister (FM) Nirmala Sitharaman on Sunday, which was a first, had an excellent domestic macro backdrop. According to the first advance estimates, gross domestic product (GDP) in constant prices is projected to grow 7.4 per cent in the current financial year, against 6.5 per cent in 2024-25.
Enforcement agencies have highlighted risks related to money laundering and terror financing, prompting closer scrutiny of crypto platforms operating in India.
'For those in for the long haul, this is a God-given opportunity.' 'Your market is falling despite strong fundamentals, and such a clear roadmap has been announced.'
'Sebi's move to cap brokerage charges will help investors by lowering the overall cost of investments.'
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