Trading in F&O contracts to be dearer
New Delhi, March 24
The government on Friday proposed hiking the securities transaction tax (STT) on Futures & Options (F&O) contracts, a move that will increase the trading costs in the derivatives segment and help in curbing excessive trades.
In the Finance Bill 2023, passed by the Lok Sabha on Friday, the STT on options is proposed to be increased to 0.0625% from 0.05% and on futures contracts to 0.0125% from 0.01%.
Analysts said higher STT will shore up the government’s revenue to some extent and also discourage excessive trading since a large number of retail traders are losing money in the segment.
After the Lok Sabha cleared the Finance Bill, which has 64 official amendments, the Finance Ministry issued a statement saying there was a typographical error in the amendments with respect to the change in STT on option trading.
