The surprise 25 per cent hike in securities transaction tax (STT) on sales of futures and options (F&O) contracts has met with a disapproval from the stockbroking community, who fear a hit on volumes, impact costs and profitability.
The Ministry of Finance, correcting a typographical error in the amendments to The Finance Bill,2023 announced an increase in STT from the current rate of ₹5,000 to ₹6,250 per 1 crore for sale of options.
Further, for sale of futures in the securities, STT rate has been increased from 0.01 per cent to 0.0125 per cent, translating into ₹1,250 per ₹1 crore.
These changes will be applicable from April 1, 2023.
Voicing out concerns and requesting for a review of the decisions, stock brokers said that the higher STT will increase the cost of transacting in the domestic markets, which is already high compared to global standards.
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