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Home News Why F&O trading will attract more tax from next month — explained

Why F&O trading will attract more tax from next month — explained

Trading F&O: The Finance Bill 2023 amendments call for raising the Security Transaction Tax (STT) on the sale of options and futures as of April 1, 2023. This will result in an increase in the price of trading futures and options (F&O). The STT for the sale of options has been increased to 23.52 percent, according to the amendment to Finance Bill 2023 that the Lok Sabha introduced and approved on Wednesday. from 2,100 to 1,700 for a $1 million revenue. Likewise, STT on special of fates contracts has been expanded to 25 percent. 1,250 from the 1,000 currently in use against a 1 crore turnover. The new STT will take effect on April 1, 2023, which is the first day of the new fiscal year, also known as FY24.

What does the Finance Bill 2023 amendment say? The STT on the sale of options has been increased to 2,100 on a 1 crore turnover, up from 1,700 in the past. STT has been increased on future contract sales to 1,250 percent of a crore-dollar turnover, or 1,000 percent under the current tax system. STT is applied to the premium, not the strike price, in options.


“The move is a double whammy for high-frequency F&O traders,” Profitmart Securities Head of Research Avinash Gorakshkar stated regarding the increase in STT on F&O trading. As of late, NSE chose to end the ‘don’t work out’ highlight.” announced. Since auto settlement will not be available to F&O traders beginning at the end of April, this will have a significant impact on them. High-frequency F&O traders will be further discouraged by this increase in STT, which will have a negative impact on F&O trade volumes.

Avinash Gorakshkar said that rising the STT in the F&O portion ought to have come at the hour of postponed of the Association Spending plan and not in the Money Bill 2023 correction.

Disclaimer: O2help is not responsible for the opinions or recommendations expressed above, which are those of individual analysts or brokerage firms. Before making any investment decision, we recommend that investors consult licensed professionals.


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