MC EXCLUSIVE STT has not been done for revenue consideration; tried to deter speculation, says FM Sitharaman

Finance Minister Nirmala Sitharaman says DMK “feeling insecure because of Vijay”

The increase in Securities Transaction Tax (STT) for futures and options segment in the Budget has not been done for revenue consideration, but to bring a deterrent for speculative trading, Finance Minister Nirmala Sitharaman said in an exclusive interview with Network18 Group Editor-in-Chief Rahul Joshi.

“There are people who, within India, are saying, India's markets are overpriced. I'm not even getting into that debate. We are only touching on futures and options section of the market, cash is not even touched…, we have tried bringing in a deterrent where speculation exists,” the finance minister noted in the first interview post Budget.

The government in the Budget presented on February 1 had raised the STT on Futures to 0.05% from the present 0.02%. While STT on options premium and exercise of options was raised to 0.15% from the present rate of 0.1% and 0.125%, respectively.

Discussing the decision, the finance minister noted that the Ministry of Finance also received requests from parents asking if the Ministry would wait and watch as people lose money.

According to a SEBI report, about 90 percent of F&O traders lost money because of market illiteracy, whereas more than 75 percent of loss-makers kept trading even after losing money for two consecutive years.

“The market regulator will also do this, the institution will do its bit,” Sitharaman clarified that the decision did not affect the larger market.