Budget 2024: D-Street captains urge FM Sitharaman to hike STT charges on high frequency traders
Nirmala Sitharaman to increase Securities Transaction Tax (STT) on high frequency traders. The demand was put before the FM in a pre-budget consultation meeting on Thursday.
STT is applicable on every sale and purchase of equities listed on the exchanges. The rate of STT during the sale of options or futures is 0.017% and 0.01%, respectively.
Moreover, there was no discussion on a proposal for additional tax levy on futures & options (F&O) trades to discourage trading among retail investors, ETNow reported citing its sources.
Earlier on Thursday, it was reported that the upcoming Union Budget could impose higher tax on F&O income. It was in view of hyperactive retail traders losing tonnes of money in the derivatives market. The report said the government is said to be considering a proposal to impose higher income tax on F&O by treating it akin to income from lottery or cryptocurrencies in the Union Budget.
Under this, the government is mulling adjustments to the tax treatment of F&O transactions by reclassifying it from 'business income' to 'speculative income' and even imposing a TDS, Financial Express reported.
Being planned to curb retail participation in the derivatives market, the change will mean that F&O income may start getting the same tax treatment as lotteries and cryptocurrencies.
Currently, income from F&O transactions is treated as business income and taxed according to income slabs of 5%, 20%, and 30%. The existing classification also allows gains from F&O to be offset against losses from other
