STT Hike: Nifty Traders Face Losses Even After 20-Point Gain Post-Budget

• The Union Budget significantly increased Securities Transaction Tax (STT) on Futures & Options (F&O) trading, shocking traders.
• STT on futures trading rose by 150% (0.02% to 0.05%), and on options trading by 50% (0.01% to 0.015%).
• Using Zerodha's calculator, a Nifty futures trade with 20 points gain (25,100 to 25,120) will result in a loss due to increased STT and other charges.
• From April 1, new STT rates will make even profitable trades unprofitable for short-term traders, pushing them towards losses.
• The government justifies the STT hike by stating the F&O market's speculative nature and its large transaction volume (500 times India's GDP) poses an economic risk, aiming to encourage long-term investment.

Why It Matters: Increased STT on F&O trading makes short-term gains difficult, potentially leading to losses even on profitable trades.