New Delhi, Feb 1 The government on Sunday said the intent behind the hike in the Securities Transaction Tax (STT) on futures and options is to address systemic risks and curb excessive speculation.
Addressing the media here after the Budget 2026-27 was presented, Revenue Secretary Arvind Shrivastava said the intent to increase STT on futures and options is aimed at curbing excessive speculation as well as systemic risks linked to STT.
The stock market reacted negatively to the hike in STT, crashing more than 2 per cent during the intra-day trade. It, however, recovered a bit later.
Shares of online brokerages Angel One and Groww fell up to 10 per cent as Finance Minister Nirmala Sitharaman proposed to raise STT on futures to 0.05 per cent from 0.02 per cent and on options to 0.15 per cent from 0.1 per cent. Nifty Capital Markets index crashed 6 per cent following the Budget announcement.
Amit Majumdar, Group Chief Strategy Officer, Angel One Ltd, said that in Q3 FY26, F&O brokerage contributed about 44 per cent of their gross revenue, while interest income from client funding and our broader platform accounted for around 33 per cent, with the rest coming from cash and commodity broking, depository, distribution, and other income streams.
"This diversified mix reinforces the resilience of our model and gives us confidence that the broader trajectory of our business remains firmly intact," he said.
STT is a tax levied on the value of securities transactions carried out on recognised stock exchanges in India. It applies to trades in equities, equity mutual funds, and derivatives such as futures and options. The tax is collected at the time of the transaction, irrespective of whether the investor makes a profit or incurs a loss.
Experts attributed the intra-day stock market crash to the hike in the charges.
"This is a meaningful jump, not a marginal tweak, and it is likely to have a direct dampening effect on F&O volumes, particularly among high-frequency traders, proprietary desks, and cost-sensitive strategies," said Aakash Shah from Choice Equity Broking.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor