Budget 2026: F&O Taxes Up, Retail Buyback Tax Down

• Union Government 2026 proposes to increase STT on Futures from 0.02% to 0.05% and on Options from 0.1% to 0.15%.
• The move aims to address concerns about over-speculation in the Indian derivatives market, impacting HFTs and wealthy investors.
• Sebi's 2025 study revealed over 90% of retail investors incurred losses in the F&O market, leading to tighter participation rules.
• Retail investors participating in buybacks will now categorize gains as capital gains, reducing their tax rate to 12.5% for long-term holdings.
• Promoters face increased buyback tax rates: 22% for corporate entities and 33% for non-corporate entities, to prevent tax arbitrage.

Why It Matters: Budget 2026 increases F&O taxes to curb speculation while reducing buyback tax for retail investors.