STT Hike in Budget 2026: What F&O Traders Need to Know
STT Hike in Budget 2026: What F&O Traders Need to Know
Budget 2026 raises STT on futures and options, edging up derivatives costs from April 2026 while equity STT remains unchanged.
Starting April 1, 2026, Securities Transaction Tax (STT) on derivatives will rise after Budget 2026. Finance Minister Sitharaman announced higher rates on futures and options trading as part of changes to the Finance (No. 2) Act, 2004, saying: I propose to raise the STT on Futures to 0.05 percent from 0.02 percent, and STT on options premium and exercise of options are both proposed to be raised to 0.15 percent from the present rates of 0.10 percent and 0.125 percent respectively. This change comes through Clause 143 of the Finance Bill, which amends Section 98 of the IT Act, governing STT rates on derivatives transactions. The revised rates will apply from the tax year 2026-27 onwards. Only derivatives STT rates have been revised from April 1, 2026, while equity delivery and equity mutual fund STT rates remain unchanged. STT is a transaction-based tax levied on the purchase or sale of specified securities traded on recognised stock exchanges and is not based on profit or income. The tax is collected automatically by the exchange or intermediary and deposited with the government at the time of execution.
