Quick Summary
For equity investors, market direction alone no longer determines outcomes. What ultimately matters is the return left after accounting for capital gains tax and transaction-related levies. With both capital gains tax and Securities Transaction Tax (STT) in force, investing has become a game of fine margins. As the Union Budget 2026 approaches, investors are keen to see whether the government eases this burden or continues with the existing tax structure.A major source of concern is the sharp h
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FAQ :
Equity investors are concerned about the rising costs associated with Securities Transaction Tax (STT) and Capital Gains Taxes, which reduce their net returns.
The tax on options sales increased from 0.0625% to 0.1% of the option premium, and STT on futures trades rose from 0.0125% to 0.02% of the transaction value.
Long-term capital gains (LTCG) tax on equities was raised from 10% to 12.5%, and short-term capital gains tax increased from 15% to 20%.
With capital gains tax reinstated and digital reporting systems in place, investors and experts question STT's original justification, noting that other mechanisms already provide transaction visibility.
The cumulative impact of higher CGT and STT reduces the appeal of equities, and for retail investors, especially those using SIPs, these additional costs significantly affect long-term outcomes.
Investors are hoping for a stable and predictable tax regime, lower transaction costs, and policies that favour long-term investment over frequent trading.
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