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Overview The Union Budget 2026-27 has introduced a significant change in India's capital market taxation by raising the Securities Transaction Tax (STT) on equity derivatives, namely Futures and Options (FO). The revised STT rates will come into effect from April 2026 and are aimed at curbing exces
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The government has increased STT on F&O trading to discourage excessive speculative activity, reduce market volatility caused by high-frequency trading, and promote long-term investing.
The revised STT rates for Futures and Options trading will be effective from April 1, 2026.
Higher STT will increase your cost per trade, raise the break-even point for your F&O strategies, and potentially lower profitability, especially for high-frequency and short-term traders.
No, long-term equity investors who trade delivery-based shares or mutual funds are generally unaffected as the STT on these transactions remains unchanged.
The STT rates have increased for Equity Futures (on the sell side) and Equity Options (on both premium and exercise value).
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