New Delhi, March 30 -- The hike in securities transaction tax (STT) on futures and options (F&O) trading, announced by Finance Minister Nirmal Sitharaman in Budget 2026, is set to come into effect from April 1, 2026, with the beginning of the new financial year.

The government said the STT hike is aimed at protecting small investors from speculative losses rather than driving central revenues. Various studies in the past have shown that 90% of people tend to lose money in the F&O market.

Therefore, in order to curb this speculative trading and protect the interests of the larger public, the government announced an increase in STT on futures contracts to 0.05% from 0.02%. STT on options premium and exercise of options will rise to 0.15% ...