STT Hike 2026: New Futures and Options Rates for Traders

If your futures and options (F&O) contract note now shows a bigger securities transaction tax (STT) charge, here is the reason in one line. The Finance Act, 2026 raised STT on the sale of a futures contract from 0.02 percent to 0.05 percent, and on the sale of an option from 0.1 percent to 0.15 percent of the premium. The table below sets every old and new rate side by side so you can match it against your own bill.

Section 159 of the Finance Act, 2026 (No. 4 of 2026) amends serial number 4 of the Table in section 98 of the Finance (No. 2) Act, 2004. Three entries changed:

The two option rows now meet at the same 0.15 percent, but they are still charged on different bases: the premium when you write or sell the option, and the intrinsic price when the option ends up exercised.

These are plain arithmetic examples from the rates alone, not real quotes or lot sizes. They show how the change lands on one sell.

Futures sell. Say you sell a futures position with a traded value of Rs 10,00,000.

• Old STT: 0.02 percent of Rs 10,00,000 = Rs 200.
• New STT: 0.05 percent of Rs 10,00,000 = Rs 500.
• Extra STT on that one sell: Rs 300.

Options sell. Say you sell (write) an option and collect a premium of Rs 20,000.

• Old STT: 0.1 percent of Rs 20,000 = Rs 20.
• New STT: 0.15 percent of Rs 20,000 = Rs 30.
• Extra STT on that one sell: Rs 10.

Scale those figures up or down against your own contract value and premium to see your real number.

Who pays. STT here sits on the sell side. Every entry in serial number 4 of the Table is worded “sale of an option in securities” or “sale of a futures in securities”, so the levy attaches when the contract is sold or written, not when it is bought.

From when. Be careful with the start date, because a lot of quick summaries get it wrong. The commencement clause of the Finance Act, 2026 (clause 1(2)(a)) puts “sections 2 to 129, clause (b) of section 152 and section 156” into force on 1 April 2026. Section 159, the STT change, is not in that list. What we do have is the Finance Bill, 2026 memorandum, which said of these amendments: “These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years.” So the honest position is that the Bill memorandum points to 1 April 2026 for tax year 2026-2027, while the Act's own commencement clause does not separately name section 159.

High-frequency and intraday F&O traders. The rise is largest in relative terms on futures, where the sell-side rate more than doubles, from 0.02 percent to 0.05 percent. If you turn over many futures lots a day, the STT is a fixed slice of every sell, so a higher rate is felt directly on volume, independent of whether the trade was profitable.

Occasional and hedging traders. If you sell only a few options or futures a month, the extra STT on any single trade is small, as the illustration above shows. It still adds up over a year, so it is worth reading your broker's tax or transaction statement to see the STT column separately from brokerage and exchange fees.

Either way, STT is a transaction levy on the sale itself. It is charged whether or not the trade made money, which is why active traders notice it more than buy-and-hold investors.

Three: the sale of an option in securities (now 0.15 percent of the premium), the sale of an option that is exercised (now 0.15 percent of the intrinsic price), and the sale of a futures contract (now 0.05 percent of the traded price). These are the three entries in serial number 4 of the Table in section 98 that section 159 amended.

For these three entries it is on the sell side. The Act wording for each is “sale of an option in securities” or “sale of a futures in securities”, so the charge attaches when you sell or write the contract, not when you enter it as a buyer.

The Finance Bill, 2026 memorandum said the amendments take effect from 1 April 2026 and apply for the tax year 2026-2027 and later years. Note that the Finance Act's own commencement clause (1(2)(a)) lists sections 2 to 129 for 1 April 2026 and does not name section 159, so we report the date as the Bill memorandum states it rather than as a flat statutory line.

On the sell side, the rate moved from 0.02 percent to 0.05 percent of the traded value. As an illustration, on a futures sell worth Rs 10,00,000 the STT goes from Rs 200 to Rs 500, an extra Rs 300 on that one sell. Your figure scales with your own contract value.

Because the two option rows are charged on different bases. A plain sale of an option is taxed on the premium, while an option that is exercised is taxed on the intrinsic price. After this change both are 0.15 percent, but the amount you see still depends on which base applies to your trade.

1. Open your latest contract note or your broker's tax statement and find the STT column. Match it against the table above.
2. If you also hold shares in a company that is buying back stock, read our sibling guide on the new buyback tax for promoters in Budget 2026.
3. To learn how to ask a public authority such as the Central Board of Direct Taxes for records on how a levy is administered, walk through The RTI Playbook and use our AI RTI Drafter to frame your questions.
4. To read the enacted words yourself, see the Gazette text of the Finance Act, 2026.

• The Finance Act, 2026 (No. 4 of 2026), section 159 and commencement clause 1(2), Gazette of India: egazette.gov.in
• Union Budget 2026-27 highlights, Press Information Bureau: pib.gov.in
• The Finance Bill, 2026 memorandum, on the effective date of the STT amendments (Clause 143).