The government announced a hike in the Securities Transaction Tax (STT) on futures and options to tackle systemic risks and reduce excessive speculation. Revenue Secretary Arvind Shrivastava emphasized that the move aims to address these risks associated with STT. Following the Budget 2026-27 presentation, the stock market reacted negatively, with a more than 2% decline during intra-day trading, although it partially recovered later.
Shares of online brokerages Angel One and Groww experienced a significant drop of up to 10% after Finance Minister Nirmala Sitharaman proposed an increase in STT on futures to 0.05% from 0.02% and on options to 0.15% from 0.1%. The Nifty Capital Markets index plummeted by 6% post the Budget announcement. Amit Majumdar, Group Chief Strategy Officer at Angel One Ltd, highlighted that F&O brokerage contributed around 44% of their gross revenue in Q3 FY26, with interest income and other streams making up the rest.
STT is a tax imposed on securities transactions on recognized Indian stock exchanges, including equities, equity mutual funds, and derivatives like futures and options. The tax is collected at the time of the transaction, regardless of the investor’s profit or loss. Market experts linked the intra-day stock market decline to the raised charges. Aakash Shah from Choice Equity Broking noted that the significant increase in STT is expected to directly impact F&O volumes, especially among high-frequency traders and cost-sensitive strategies.
