Government has increased STT on derivatives
STT Hiked on F&O Trading : In the Union Budget 2026-27, the Central Government has taken strict steps regarding the stock market, especially futures trading (Derivatives/F&O). Finance Minister Nirmala Sitharaman’s announcement of increasing the Securities Transaction Tax (STT) on derivatives is not just a tax reform but a big effort to curb the ‘blind race’ going on in the market. Well-known market veteran and founder of GQuant Investech, Shankar Sharma has not only welcomed this decision of the government, but has also called it a historic step to save the youth of the country.
Generations are being ruined by this ‘poison’ of the market
Shankar Sharma has used very strong words while expressing his opinion on the social media platform ‘X’. He has compared derivatives trading to drug addiction and termed it as “Poison multiplied by Cocaine”. He believes that this addiction is hollowing the roots of the youth of our country and its ill effects will be felt for many generations to come.
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Sharma’s argument is absolutely clear. According to him, Futures and Options (F&O) in India do not add any real ‘value’ to the economy, rather it reduces ‘value’. He has described it as a kind of ‘wealth transfer’, where money is coming out of the pockets of common traders and going into the pockets of F&O specialist brokers. Describing it as dangerous as “drug and gun trade”, he said that even though it cannot be stopped completely, it can definitely be discouraged by imposing heavy taxes on it. Congratulating the Finance Minister, he made it clear that this step was the need of the hour.
Only speculators will be shocked, not common investors.
Since the budget, the question in the minds of investors was whether the increased tax will be applicable on all types of deals? The government has made its position completely clear on this. Revenue Secretary Arvind Srivastava has clarified that this increase in STT is limited to futures and options (F&O) trading only. That means if you buy or sell shares in delivery, it will not affect you. Tax rates in all other segments of the market will remain the same.
The government believes that the kind of volume seen in the derivatives market is less investment and more ‘speculation’. The government’s intention is clear to prevent the market from becoming a gambling house and to promote serious long-term investments.
9 out of 10 people are losing money, yet the addiction is not going away
Behind this strictness of the government is the bitter truth of SEBI, which is often ignored. A SEBI study revealed that 9 out of every 10 individual traders (retail investors) suffer huge losses in the equity F&O segment. Despite this, small investors are investing their hard-earned money in this in their desire to become rich overnight.
Also read- Investor protection or shock? Sitharaman told why tax on F&O was increased?