Perhaps the writing was on the wall. Even the bull run of Indian public markets in 2025 which ended the year roughly 9-10% higher than a year ago and the record public market listings did not stop the government from putting brakes on the aggressively growing but highly volatile derivative trading in the country. Building upon its commitment of raising the transaction cost for Futures & Options trading, the union finance minister Nirmala Sitharaman announced during Budget 2026 further raising of the Securities Transactions Tax on F&O trading, setting the markets in a frenzy. The markets, which remained open on Budget day, went into a sell-off frenzy set off by STT hikes on F&O premium and execution, as well as the other major taxation announcement of taxing the buybacks at par with capital gains tax. Sitharaman proposed raising the STT on Futures to 0.05% from the present 0.02%, while options premium and exercise of options are both proposed to attract an STT of 0.15%, up from the present rate of 0.1% and 0.125% respectively. These changes will be applicable for trades and investments on and after April 1, 2026. “The rates of STT have been revised periodically to reflect changes… Read MoreInc42 Media
