3 months ago
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Government raised transaction taxes connected equity derivatives successful Union Budget presumption connected Sunday (February 1, 2026) successful a bid to chill down derivatives markets, sending banal indexes down connected concerns implicit trading higher costs.
The Budget besides projected changes successful taxation of buybacks, which involves companies repurchasing their ain shares from existing shareholders usually from the unfastened marketplace oregon done a tender offer.
The Nifty 50 scale was down 0.84%, portion the BSE Sensex scale was down 0.74%
The authorities projected expanding the securities transaction taxation connected futures to 0.05% from 0.02% and on options to 0.15% from 0.1%. It besides said stock buybacks would beryllium taxed arsenic superior gains astatine slab rates, with ample shareholders facing further levies.
"Higher transaction costs are apt to trim trading volumes, dampen short-term momentum, and little profitability for progressive marketplace participants. FII information successful derivatives may besides mean arsenic post-tax trading ratio declines, impacting wide liquidity," Raj Gaikar, a probe expert with Mumbai-based SAMCO Securities, said.
"This tin make a cascading effect connected gross streams of broking companies, exchanges, AMCs, and depositories, which are intimately linked to marketplace turnover," helium added.
Other analysts said that the summation volition further chill derivatives trading successful India and pb to simplification successful volumes.
"The intent appears to be measurement moderation alternatively than gross maximisation, arsenic immoderate imaginable gross summation could beryllium offset by little derivative volumes," Shripal Shah, MD & CEO Kotak Securities said.
The authorities has been trying to trim the derivatives trading enactment done tighter regulations and accrued taxes successful the past 2 years arsenic retail investors proceed to marque losses.
