Budget 2026: FM Sitharaman Hikes STT on F&O, Tightens Buyback Tax Rules
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Firstpost•01-02-2026, 12:36
Budget 2026: FM Sitharaman Hikes STT on F&O, Tightens Buyback Tax Rules
- •Finance Minister Nirmala Sitharaman announced a significant hike in Securities Transaction Tax (STT) on futures and options (F&O) trades in Union Budget 2026.
- •STT on futures contracts increased from 0.02% to 0.05%, while STT on options premium trading rose from 0.10% to 0.15%.
- •The government plans to tax share buybacks as capital gains for all shareholders and may impose additional tax on promoters to close loopholes.
- •Minimum Alternate Tax (MAT) rate was reduced from 15% to 14%, with provisions for setting off brought-forward MAT credit.
- •Customs duty exemptions were withdrawn on select domestically manufactured items, and duty-free import limits for seafood processing inputs were raised.
Why It Matters: Budget 2026 makes derivatives trading costlier, tightens buyback taxation, and offers selective corporate tax relief.
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