Shares of market infrastructure and brokerage companies came under sharp pressure on Sunday after the government announced higher securities transaction tax (STT) rates in the Union Budget 2026.
Stocks such as BSE, Angel One and Groww fell more than 10 per cent, while other capital market-linked names, including Central Depository Services (India) (CDSL) and Nuvama Wealth Management, also saw steep declines.
The sell-off followed the Budget proposal to raise STT on derivatives transactions. Under the new measures, the STT on options has been increased to 0.05 per cent from 0.02 per cent, while the levy on futures has been raised to 0.15 per cent from 0.10 per cent.
Market participants said the higher tax rates are likely to increase transaction costs for traders and could weigh on trading volumes across exchanges and brokerage platforms, particularly in the derivatives segment.
Sentiment was further dented after the government declared a change in the taxation of share buybacks. Going forward, buyback proceeds will be taxed as capital gains for all categories of shareholders.
This marks a departure from the earlier framework, under which buyback proceeds were treated as dividend income in the hands of shareholders and taxed according to individual tax slabs, with companies required to deduct 10 per cent tax at source before making payouts.
Finance Minister Nirmala Sitharaman announced the changes during her Budget 2026 speech in the Lok Sabha, marking her ninth consecutive Union Budget. |
