STT hike: Brokers to seek deferment, citing RBI's reprieve and market 'doldrums'

A leading stockbrokers' association plans to ask the government to defer the increase in the securities transaction tax (STT) on equity futures and options after the Reserve Bank of India postponed implementation of rules on bank funding of capital market intermediaries amid the Iran war-induced rout in the stock markets."The RBI deferment comes as a major reprieve, given the doldrums the market is in because of the West Asia crisis," said K Suresh, national president of the Association of NSE Members of India (ANMI). "Now, we will request the ministry of finance to temporarily hold back imposition of the hike in securities transaction tax on equity futures and options, given the drop in volumes it could lead to, given the extant conditions."In the FY27 budget presented on 1 February, the government proposed to increase the STT on equity futures to 0.05% from 0.02% and on options premium and exercise of options to 0.15% from 0.1% and 0.125%, respectively, from 1 April.

The Finance Act, 2026, notified on 31 March, gives effect to the budget proposals."Volumes on account of the STT hikes could dip by 10-15%," Suresh said. "Given the steep fall in the markets since the start of the Iran war, the government could consider temporary deferment, like the RBI's postponement of rules for funding capital market intermediaries."Days after finance minister Nirmala Sitharaman proposed the hike in the STT, the central bank effectively barred banks from lending to proprietary traders, among other directions, on 13 February.