India Raises Stock Trading Taxes to Curb Speculation
India’s government has increased taxes on stock market trading, particularly on derivatives, in a bid to curb excessive speculative activity. As part of the Union Budget 2026–27 presented on 1 February 2026, the Securities Transaction Tax (STT) on equity derivatives was raised: the STT on futures contracts has been increased from 0.02 % to 0.05 %, and the tax on options premiums was raised from 0.1 % to 0.15 % of the transaction value. The move makes frequent trading in futures and options more expensive, especially for retail and high-frequency traders, and is seen by the government as a tool to discourage short-term speculation and promote more stable market participation. These tax changes were accompanied by other fiscal measures, such as treating share buybacks as capital gains for tax purposes, further tightening financial regulations. The market reacted sharply, with major stock indices including the BSE Sensex and Nifty 50 moving lower and shares of brokerage and exchange firms declining as higher trading costs were factored in by investors. Analysts say while the tax hikes could help temper speculative trading, they may also dampen trading volumes and affect liquidity in the derivatives segment if sustained. �
reuters.com +1
$$BSE – Trading volume kam hui to revenue impact
$MCX$mc