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Finance Minister Nirmala Sitharaman presented Budget 2026 in Parliament on 1 February 2026, in which she has made many announcements ranging from Railways to Defence. Meanwhile, he took such a decision regarding the stock market, which shook the entire market. The Finance Minister gave a shock to those trading in futures and options. Announced increase in security transaction tax. As soon as this announcement was made, the Indian stock market crashed. Investors have suffered losses but the government will not get much benefit from this decision. Because increasing charges may reduce trading volume by up to 30 percent.

The Finance Minister has increased the charge on futures from 0.02 percent to 0.05 percent and also increased the STT charge on options premium to 0.15 percent. The market did not like this decision taken by Nirmala Sitharaman and the market fell badly. After this, Investment Tax India has also presented some figures which have revealed that the F&O market is 500 times larger than India's GDP, hence a 30 percent fall in volume can be harmful.

Expert opinion

Moneycontrol reports that brokerages expect a major impact on volumes. Dheeraj Relly, MD and CEO, HDFC Securities, said the increase in STT in F&O is definitely negative for volumes and maybe a 20-30 per cent volume decline from here cannot be ruled out. This will definitely increase the transaction costs in the F&O market. He further said that I think this is now the last nail in the coffin in terms of a significant increase in STT costs. According to him, this is a huge cost and will impact the market.

The sharp increase in STT on futures appears to be due to changes in turnover dynamics in the F&O market. In the last one year, options premium turnover has declined by about 25 per cent, leading to lower STT collections from the options segment. Therefore, the 150 per cent increase in futures STT could be a deliberate step to make up for the shortfall in revenue from options.