The earlier increase in the STT happened in the full Budget for FY24, presented in July 2024, after the General Elections. Then, in October last year, amid a surge in derivatives volumes, SEBI rolled out a series of measures to rein in excessive speculation.
As an initial reaction, the benchmark index Nifty50 witnessed a sharp sell-off, losing about 2 per cent on Sunday. While the impact may be marginal for participants who trade less volume, those dealing in large volumes, such as high-frequency traders, could see a meaningful rise in their trading costs.
Quantum of increase
Consider how the STT outgo changes with an example. If a trader sells Nifty futures at 25,000, the contract value works out to ₹16,25,000 (25,000 multiplied by Nifty’s lot size of 65). STT is calculated on this amount.
Under the revised rates, the trader will have to pay ₹812.50 (₹16,25,000 multiplied by 0.05 per cent) as STT, compared with ₹325 earlier (₹16,25,000 multiplied by 0.02 per cent). In effect, the STT outgo more than doubles for the same trade.
In the case of options, take a trader selling a 25,000-strike Nifty call option at a premium of ₹300. The premium received would be ₹19,500 (₹300 multiplied by the lot size of 65). The revised STT would be ₹29.25 (₹19,500 multiplied by 0.15 per cent), compared with ₹19.50 earlier (₹19,500 multiplied by 0.10 per cent).
Find an illustration in the table on how a high-frequency trader, who attempts to capture a 0.5 per cent move in Nifty futures, can be impacted.
It is worth noting that STT does not apply to commodities, which are subject to the Commodity Transaction Tax (CTT). CTT has not been revised in this Budget. That said, STT collections have been a significant contributor to the exchequer.
As per the Central government’s Annual Financial Statement, STT collections for FY25 stood at ₹52,197 crore, up from ₹11,528 crore in FY19. The revised estimate for FY26 is ₹63,670 crore, an increase of 22 per cent over FY25.
Published on February 1, 2026
