The Finance Bill 2026 proposes a calibrated increase in the Securities Transaction Tax (STT) on futures and options (F&O) trades, in response to the surge in speculative activity in the derivatives market. While the STT framework remains unchanged, higher rates are expected to increase transaction costs for short-term and high-frequency traders, without materially impacting genuine hedging activity.
The revised STT rates will apply to F&O transactions undertaken on or after 1st April 2026.