Budget increases securities transaction tax (STT) on derivatives

2 FEBRUAURY 2026

The benchmark Nifty 50 index declined 1.96% after Finance Minister Nirmala Sitharaman announced securities transaction tax (STT) on derivatives trades will be increased in the Union Budget 2026-27.
Ms. Sitharman proposed to raise the STT on Futures to 0.05% from present 0.02%.
STT on options premium and exercise of options are both proposed to be raised to 0.15% from the present rate of 0.1% and 0.125% respectively.
The increase in tax rate, which is intended to reduce the speculation in the segment, is also expected to reduce volumes in the derivative market.
The TReDS (Trade receivables discounting scheme) would be a mandatory transaction settlement platform for all purchases from MSMEs by CPSEs.
A credit guarantee support mechanism would be introduced through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for invoice discounting on TReDS platform
Government e Marketplace (GeM) would be linked with TReDS and TReDS receivables would be introduced as asset-backed securities, helping develop a secondary market.