The Finance Minister announced in the Union Budget 2026 that Securities Transaction Tax (STT) on derivatives will rise from April 1, 2026. The Finance Minister Sithraman, in her 9th budget speech, proposed higher rates on futures and options trading. The revised rates will apply from the tax year 2026-27 onwards.
Finance Minister Nirmala Sitharaman announced to raise the STT on Futures to 0.05 percent from present 0.02 percent. STT on options premium and exercise of options are both proposed to be raised to 0.15 percent from the present rate of 0.1 percent and 0.125 percent respectively. It is important to note that only derivatives STT rates have been revised from April 1, 2026, while equity delivery and equity mutual fund STT rates remain unchanged.
What is Securities Transaction Tax (STT)?
Securities Transaction Tax (STT) is a tax charged by the Government of India on the buying or selling of securities in the stock market. It is automatically deducted at the time of the transaction when you trade through a recognised stock exchange.
STT is charged on transactions such as:
- Buying and selling of shares (equity)
- Trading in equity derivatives (futures & options)
- Sale of equity-oriented mutual funds
- Intraday and delivery-based trades
Who Pays STT?
- Investors and traders pay STT
- It is collected by the stock exchange and passed on to the government
- You don’t need to pay it separately—it is auto-deducted
Why Does the Government Levy STT?
- To generate revenue
- To track stock market transactions
- To bring transparency in securities trading
- To reduce tax evasion in capital market activities
Also Read: Download Union Budget 2026 Official PDF and Documents [Highlights PDF]
New and Old STT Rates
| Segment | Old rate | New rate (from April 1, 2026) |
| Options premium | 0.1% | 0.15% |
| Options exercise | 0.125% | 0.15% |
| Futures trading | 0.02% | 0.05% |
Updated STT rates table as per Budget 2026
| S No. | Transaction | STT Rate (From Apr 1, 2026) | Payable by |
| 1 | Purchase of equity shares (delivery) | 0.1% | Buyer |
| 2 | Sale of equity shares (delivery) | 0.1% | Seller |
| 2A | Sale of equity mutual fund units (delivery) | 0.001% | Seller |
| 3 | Sale of equity shares (non-delivery / intraday) | 0.025% | Seller |
| 4(a) | Sale of options (premium value) | 0.15% | Seller |
| 4(b) | Sale of options (when exercised) | 0.15% | Buyer |
| 4(c) | Sale of futures | 0.05% | Seller |
| 5 | Sale of equity mutual fund units to MF | 0.001% | Seller |
| 5A | ULIP-linked equity fund redemption | 0.001% | Seller |
| 6 | OFS sale of unlisted shares (later listed) | 0.2% | Seller |
| 7 | OFS sale of unlisted business trust units | 0.2% | Seller |
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