BUDGET
STT hike on F&O trades to curb speculative trading, Sitharaman says
This story was originally published at 16:51 IST on 1 February 2026
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--Sitharaman on hike in STT on F&O: Want to discourage speculative trading
--Sitharaman: No intention to tweak STT for equity trading other than F&O
MUMBAI – The government has raised the Securities Transaction Tax on futures and options to discourage speculative trading, Finance Minister Nirmala Sitharaman told reporters in a press conference after presentation of the Union Budget for 2026-27 (Apr-Mar).
The budget proposes raising the securities transaction tax on futures contract transactions to 0.05% from 0.02% and that on options premium and exercise of options to 0.15% each from 0.1% and 0.125%, respectively. "We are not against it and respect the activity that takes place. But how can government keep quiet when we see losses to such small investors," Sitharaman said. "So this nominal increase is aimed purely at high speculation. Only to deter them."
Before finance minister, revenue secretary Arvind Shrivastava, too, said that the only change in STT is only for F&O trades and that the intention was to discourage speculative trading and handle systemic risk in derivatives market. "It is felt that when you look at the volume of the transactions of futures and options, whether you compare it to the size of the GDP or size of the underlying securities market, it is largely in the realm of heavy speculation, which results in losses to the small, retail and unsophisticated investors." End
Reported by Sunil Raghu
Edited by Akul Nishant Akhoury
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