Budget 2026: F&O Taxes Up, Retail Buyback Tax Down
Business
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Moneycontrol•01-02-2026, 12:33
Budget 2026: F&O Taxes Up, Retail Buyback Tax Down
- •Union Government 2026 proposes to increase STT on Futures from 0.02% to 0.05% and on Options from 0.1% to 0.15%.
- •The move aims to address concerns about over-speculation in the Indian derivatives market, impacting HFTs and wealthy investors.
- •Sebi's 2025 study revealed over 90% of retail investors incurred losses in the F&O market, leading to tighter participation rules.
- •Retail investors participating in buybacks will now categorize gains as capital gains, reducing their tax rate to 12.5% for long-term holdings.
- •Promoters face increased buyback tax rates: 22% for corporate entities and 33% for non-corporate entities, to prevent tax arbitrage.
Why It Matters: Budget 2026 increases F&O taxes to curb speculation while reducing buyback tax for retail investors.
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