This is not a budget that aimed to kick-start the markets through speculative trading cycles or provides instant gratification to equity markets. Rather, it is a budget that has its heart set on long-term capital formation, real-sector productivity; focus on key areas of the future economy and a consequent rebalancing of the growth model in India to move away from the dangers of over-financialization.
The government has proposed an increase in the Security Transaction Tax (STT) on futures and options trading in the stock market in the Union Budget 2026. STT on futures has been increased from 0.02 per cent to 0.05 per cent, a 150 per cent increase over the existing rate. Similarly, on option trading, there is an increase from 0.1 per cent to 0.15 per cent on the sale of options (premium) and 0.125 per cent to 0.15 per cent on the sale of options(exercised). This triggered a sudden sell-off on Dalal Street on February 1, 2026, the Budget Day, following an increase in STT. This response by the market, at first, may seem to be counterintuitive but is, in fact, completely expected and in line with the long-term goals of the economy and the self-sufficiency of the stock market.
The government has proposed an increase in the Security Transaction Tax (STT) on futures and options trading in the stock market in the Union Budget 2026. STT on futures has been increased from 0.02 per cent to 0.05 per cent, a 150 per cent increase over the existing rate. Similarly, on option trading, there is an increase from 0.1 per cent to 0.15 per cent on the sale of options (premium) and 0.125 per cent to 0.15 per cent on the sale of options(exercised). This triggered a sudden sell-off on Dalal Street on February 1, 2026, the Budget Day, following an increase in STT. This response by the market, at first, may seem to be counterintuitive but is, in fact, completely expected and in line with the long-term goals of the economy and the self-sufficiency of the stock market.
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