The Indian government has recently announced an increase in the Securities Transaction Tax (STT) for trading in equity futures and options. The STT is a tax levied on the purchase or sale of securities listed on Indian stock exchanges.
Starting from April 1st, 2023, the STT rate for equity futures trading will be increased from 0.01% to 0.05%, while the STT rate for options trading will be increased from 0.05% to 0.1%. This hike in STT is expected to generate additional revenue for the government.
The increase in STT has received mixed reactions from market participants. Some experts believe that the hike could lead to a decrease in trading activity as it would increase transaction costs for traders. However, others feel that the impact of the hike will be limited as the STT is a relatively small component of the overall transaction cost.
It is important to note that the STT hike only applies to equity futures and options trading and does not impact other types of securities trading. Traders and investors involved in equity futures and options trading should take note of this new development and adjust their trading strategies accordingly.