Budget 2026: Government's big announcement rocks entire stock market

New Delhi (The Uttam Hindu): Finance Minister Nirmala Sitharaman presented the budget in Parliament on Sunday and during this she announced to increase the Security Transaction Tax (STT) on Futures and Options (F&O) to reduce speculation in the stock market.

Budget 2026 proposes to increase the STT on futures from the current 0.02 percent to 0.05 percent. The STT on options is now proposed to be increased to 0.15 percent. Furthermore, the government has proposed to include capital gains for all types of shareholders upon share surrender in a buyback. This will result in higher tax on buyback income.

During the Budget speech, the Finance Minister stated that under the new tax structure, corporate promoters will effectively be taxed at 22 percent and non-corporate promoters will be taxed at 30 percent for buyback transactions. This move aims to streamline taxation, reduce disparities between shareholder classes, and ensure a more uniform and transparent tax regime for buyback-related income.

However, the government made no announcement regarding LTCG and STCG in this budget. Following this announcement, stock market stocks saw a significant decline. By 1 p.m., shares on the Bombay Stock Exchange (BSE) fell 10.50 percent, CDSL fell 5.27 percent, brokerage firm Angel One fell 11 percent, Groww fell 7.25 percent, and HDFC AMC fell 3.82 percent.

The stock market also remained weak, with the Sensex down 913 points, or 1.11 percent, at 81,356, and the Nifty down 284 points, or 1.10 percent, at 25,043.