Finance Bill 2023: Govt hikes securities transaction tax on sale of F&O

Government has hiked the securities transaction tax by 25% on the futures and options sale. The hike was introduced in the Finance Bill 2023.

The STT has been hiked by 23.5% on the sale of options and 25% on the sale of futures. As per the amendments, STT on the sale of options has been hiked to Rs 6,200 on a turnover of Rs 1 crore. On the sale of futures contracts, the STT has been hiked to Rs 1,250 on Rs 1 crore of turnover. Earlier the trader had to pay Rs 5,000 for options and Rs 1,000 for futures.

The new rules will come into effect from the new financial year 2023-24.

Besides the hike in STT, option traders also have another blow to deal with as the National Stock Exchange (NSE) has chosen to withdraw the Do Not Exercise (DNE) facility for those trading in the options segment from March 30

The Finance Bill 2023, with 64 official amendments was passed in Lok Sabha on Friday without discussion giving effect to tax proposals.