In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman announced an increase in the Securities Transaction Tax (STT) on equity futures from the existing rate to 0.05%. The move aims to widen the tax base and boost government revenue, while ensuring a fairer trading framework.
The announcement prompted cautious reactions in the stock markets, with investors expressing concern over higher transaction costs on futures trading. Analysts noted that while the hike is relatively modest, it could influence high-frequency and large-volume traders.
The government expects that the incremental STT revenue will contribute to fiscal stability, aligning with broader measures in Budget 2026 focused on infrastructure, healthcare, and capital expenditure. Experts suggest that the impact on retail investors may be limited, but institutional traders could reassess their strategies to factor in the higher tax.