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.
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.
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.
India's net direct tax collections increased by 5.12 per cent to over Rs 23.40 lakh crore in the 2025-26 fiscal year, but this figure still fell short of the revised budget target of Rs 24.21 lakh crore, primarily due to income tax cuts implemented earlier in the year.
Sebi cautions investors against fake notices demanding Securities Transaction Tax (STT) payments and warns about fraudsters posing as account handlers promising risk-free profits.
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.
Sectors throw up a wishlist for the Finance Minister.
The Securities Transaction Tax regime covering shares as well as mutual funds has come into effect from October 1.
From the financial year 2025-2026, the government has introduced a new column in the tax return form for presumptive taxpayers, requiring them to disclose their year-end investments. This requirement was not present last year.
India's market landscape is undergoing significant shifts, with bank-backed brokerages potentially regaining dominance over discount platforms due to regulatory changes and increased taxes, while the IPO pipeline faces a slowdown amid heightened global volatility.
What items did Finance Minister Nirmala Sitharaman make costlier?
Indian equities trading activity saw a moderation in FY26, with cash market turnover declining and derivatives growth remaining subdued due to regulatory tightening and weak market performance. Further impacts are expected from new RBI norms and a hike in Securities Transaction Tax (STT).
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.
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.
The tax is collected by brokers on behalf of the government and forms a key component of the Centre's tax revenues.
CA Sumeet Mehta analyses the Union Budget 2026-2027, identifying key positives and negatives.
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.
The economy overall was bleak last year with sticky inflation forcing the RBI to raise the interest rates aggressively.
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.
A Deputy Commissioner of the Commercial Tax Department in Karnataka was arrested for allegedly accepting a bribe of Rs 6 lakh from a businessman related to an Input Tax Credit case.
The deduction of Securities Transaction Tax on trade in equities will come into force in major bourses from October 1.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions
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.
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 Commercial Taxes Department has arrested Mohammed Tauqeer for his involvement in generating and routing fraudulent ITC across multiple states, unearthing a GST fraud worth Rs 410 crore.
A joint team of police and SSB seized over Rs 85 lakh in Indian and Nepalese currency and detained six persons along the Indo-Nepal border in Bahraich district.
Following regulatory action against Paytm Payments Bank Ltd (PPBL), Paytm strategically separated its core operations, a move praised by analysts for preserving business continuity and governance. This separation has enabled Paytm to sustain growth and improve profitability.
Pitching for a slew of reforms in the Indian capital markets, leading bourse BSE has suggested the government bring in a new transaction taxation structure and besides seeking tax pass through status for Infrastructure Investment Trusts (InvITs).
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.
Ambareesh Baliga's quick take on the markets after the increase in STT on futures and options trading...
Apprehending a sharp decline in business, mutual funds including UTI AMC have asked Finance Minister P Chidambaram to exempt all debt instruments from the proposed 0.15 per cent transaction tax.
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.
India should not stay on the margins of this initiative. There should be a serious debate about what would be in India's best interests asserts former foreign secretary Shyam Saran.
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