STT Hike on Options, STT refers to the Securities Transaction Tax, which is a tax levied by the Indian government on transactions in securities such as stocks, bonds, and derivatives.
The tax is applied to both the buyer and seller in the transaction, and the rate varies depending on the type of security being traded and the nature of the transaction.
For example, the STT rate for equity delivery trades (where shares are bought and held for more than one day) is currently 0.1% of the transaction value for both the buyer and seller, while the STT rate for equity futures trades is 0.01% of the transaction value for the seller only.
The STT is designed to be a direct tax on transactions in securities, with the goal of generating revenue for the government while also discouraging excessive speculation and promoting long-term investment in the stock market.
“Hiked Tax on options” means that the STT on options trading has been increased. This would mean that the tax rate for options trading has been increased, which would result in higher transaction costs for traders who engage in options trading.
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STT hiked by 25 percent on future and options trading as compared to previous. Previously STT was charged on selling of option worth 1 crores is 5000 rupees and now changes to 6250 which means it was increases by 25 percent on option selling.
| STT | Previous | New |
|---|---|---|
| Options | 5000 | 6250 |
| Future | 1000 | 1250 |
STT on the sale of futures, the tax has been increased to Rs 1,250 on a turnover of Rs 1 crore against an earlier charge of Rs 1,000. This indicates that future STT was also hiked by 25 percent.
From Which Date STT was Hiked On Options ?
STT hiked for Future and Options was apply from 1 April 2023 Finance Minister told this in Lok Sabha. STT for future trading was increases by 0.0125 percent.
STT charges was same among all brokers like zerodha, groww, upstox and angel one.
STT Hike Impact On Which Traders
Increase charges was badly impacted by big future and option traders because they trade in big amount daily. Increase in STT was increases their cost in trading.
The impact of STT charges on investors and traders depends on various factors such as the volume and frequency of their trades, the size of the transaction, and the prevailing market conditions.
Government first introduce STT charge on future and option trading in 2016 lokh sabha. Before 2016 no STT charges on option trading. In 2016 tax was increases 1700 to 5000 and now to 6250.