India has increased certain tax rates on stock trading to limit speculative activities by retail investors. The national budget proposals include raising the Securities Transaction Tax (STT) on stock index futures from 0.02% to 0.05%. Similarly, the tax on option premiums and option exercises has been increased from 0.1% to 0.15%. Following this announcement, the Nifty 50 index dropped nearly 3%, with significant declines also seen in shares of the Bombay Stock Exchange (BSE) and brokerage firm Angel One. This move reflects India’s commitment to controlling speculative trading, as the country has become the largest contract trading market globally due to a growing number of retail traders. Late last year, regulatory authorities introduced several restrictions, including imposing a weekly limit on index option contracts per exchange, aimed at reducing market volatility and encouraging investor caution. Overall, the government’s new strategy is viewed as an important step toward market stability and investor protection, though the tax hike may temporarily deter some investors. Nevertheless, it is expected to improve the market’s long-term health.
Source: binance
