The STT hike in 2026 makes futures and options trading noticeably costlier from April 1, 2026. Securities Transaction Tax on futures jumped to 0.05% and on options premium to 0.15%. If you trade derivatives, this eats into every trade. If you invest for the long term, it barely touches you. Here is the full breakdown. For the official rules, see SEBI and the concept on Investopedia. This is part of the wider new income tax rules 2026.
Key Takeaways
- STT on futures rose from 0.02% to 0.05% (2.5x) from April 1, 2026.
- STT on options premium rose from 0.10% to 0.15% on the sell side.
- Options exercise STT rose from 0.125% to 0.15%.
- Equity delivery (0.10%) and intraday (0.025%) STT are unchanged.
- Long-term investors are barely affected; active F&O traders pay more.
What Changed in STT (2026)
STT is a small tax on every securities trade. Budget 2026-27 raised it sharply, but only for derivatives. The goal is to cool the F&O trading frenzy among retail investors.
STT Rates 2026: The Full List
Equity delivery (0.10%), intraday (0.025%) & MF redemption (0.001%) are unchanged.
| Transaction | Old STT | New STT (2026) |
|---|---|---|
| Futures (sell) | 0.02% | 0.05% |
| Options premium (sell) | 0.10% | 0.15% |
| Options exercise | 0.125% | 0.15% |
| Equity delivery (buy & sell) | 0.10% | 0.10% (unchanged) |
| Equity intraday (sell) | 0.025% | 0.025% (unchanged) |
| Equity MF redemption | 0.001% | 0.001% (unchanged) |
What the STT Hike Means for F&O Traders
Higher STT raises the cost of every derivatives trade. For frequent traders, those extra paise per trade compound into a real drag on returns.
The message is clear. The government wants to discourage speculative churn and steer retail money toward longer-term investing. Learn that approach in our fundamental analysis guide.
Does It Affect Long-Term Investors?
Hardly. If you buy shares for delivery or invest through SIPs, your STT is unchanged. The hike is aimed squarely at active F&O traders.
For most retail investors, this is a reminder that patient investing remains the cheaper, simpler path. Pair it with awareness of capital gains tax in our LTCG and STCG calculator.
A Quick Example
One trade looks small — but dozens a month adds up fast and can erase a thin edge over a year.
Say you sell options worth ₹1 lakh in premium. Old STT at 0.10% was ₹100. New STT at 0.15% is ₹150.
One trade looks small. But a trader doing dozens of such trades a month feels the difference fast. Over a year, it can erase a thin edge entirely.
STT Hike 2026: Frequently Asked Questions
What is the new STT on F&O in 2026?
From April 1, 2026, STT on futures rose from 0.02% to 0.05% and on options premium from 0.10% to 0.15%. Options exercise STT rose from 0.125% to 0.15%, all on the relevant side.
Did STT on equity delivery or intraday change?
No. Equity delivery STT stays at 0.10% on both buy and sell, and intraday stays at 0.025% on the sell side. Only F&O rates were hiked.
Why did the government raise STT on F&O?
The hike, announced in Budget 2026-27, aims to cool excessive retail derivatives speculation by making frequent F&O trading costlier.
How much more will an options trader pay?
Roughly 1.5 times the old STT on options premium when selling. For high-frequency traders, this adds up quickly across many trades.
Does the STT hike affect long-term investors?
Barely. If you buy and hold stocks or invest via SIPs, your STT is unchanged. The hike targets active F&O trading, not long-term investing.
This article is for education only and is not investment advice. F&O trading carries high risk and most retail traders lose money. Understand the risks fully before trading derivatives.
Related Reads
- New Income Tax Rules 2026: 8 Changes Investors Must Know
- Share Buyback Tax 2026 Explained
- LTCG & STCG Tax Calculator
- How to Analyse Any Indian Stock
- How to Start Investing in India
About the author: Mithun Srivastava is a stock market educator and founder of investwithmithun.com, writing breakdowns of real money rules for Indian investors. Last updated: June 2026.
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