STT on F&O hiked to curb excessive speculation, address systemic risk: Revenue Secretary

Finance Minister Nirmala Sitharaman

Revenue Secretary Arvind Shrivastava on February 1 clarified that the only change to Securities Transaction Tax (STT) rates in the Union Budget is for the futures and options segment, with all other STT rates remaining unchanged.

Explaining the rationale behind the move, he said the government increased STT on futures and options to address rising systemic risk in the derivatives market, emphasising that it did not want to encourage excessive speculation.

In the Budget presented on Sunday, the finance minister raised the STT on futures contracts to 0.05 percent from 0.02 percent and on options to 0.15 percent from 0.10 percent, a sharp increase aimed at curbing speculative trading in the derivatives market.