Budget 2026-27: STT Raised on Futures and Options
Why in the news
The Union Budget presented on 1 February 2026 increased the Securities Transaction Tax (STT) on futures and options, which will raise the cost of trading in derivatives.
Key facts
- Futures: STT goes up to 0.05% from the earlier 0.02%.
- Options: STT goes up to 0.15%, from 0.1% on option premium and 0.125% on exercise of options.
- Both changes were announced in the Budget speech of Finance Minister Nirmala Sitharaman.
| Instrument | Earlier rate | New rate |
|---|---|---|
| Futures | 0.02% | 0.05% |
| Options (premium) | 0.1% | 0.15% |
| Options (exercise) | 0.125% | 0.15% |
About STT
Securities Transaction Tax is a tax levied on transactions in listed securities and derivatives. It is collected at the time of the trade, so it adds directly to the cost of each transaction for traders in futures and options.
Exam angle
- Remember the new STT rates: 0.05% on futures and 0.15% on options.
- Futures STT has gone up by 0.03 percentage points.
- Questions may ask which instruments are affected: derivatives, not delivery trades.