What the April 2026 STT rise did to option and futures trading costs
The Union Budget for 2026 raised the Securities Transaction Tax on derivatives from 1 April 2026. For a single trade the change looks small; for a strategy that trades often, it can be the difference between a thin profit and a loss. This article works through the numbers.
What changed
According to published budget coverage and broker notices, effective 1 April 2026:
| Instrument | STT before | STT from 1 April 2026 | Charged on |
|---|---|---|---|
| Options (premium) | 0.10% | 0.15% | Sell side, on the premium |
| Futures | 0.02% | 0.05% | Sell side, on the traded value |
| Equity delivery and intraday | Not changed in this revision | ||
The rates for exercised options also moved; we leave those out here. Exchange circulars and your contract note are the authority. Rates and rules can change again, so check the current schedule on NSE and your broker's charges page before relying on any figure in an example.
The full list of charges on an options trade
- Brokerage: a flat amount per executed order with many discount brokers; we use ₹20 per order in our tests. Check your broker.
- STT: on the sell side only.
- Exchange transaction charge: about 0.035% of premium turnover on NSE options (we model 0.03503%).
- SEBI turnover fee: ₹10 per crore.
- GST: 18% on brokerage, exchange charges and the SEBI fee (not on STT).
- Stamp duty: 0.003% on the buy side.
- Slippage: not a charge, but real: you buy near the ask and sell near the bid. Our research uses 0.5% of premium per fill.
Worked example: one lot, one round trip
Take one Nifty lot of 65 units. You buy at a premium of ₹100 and sell at ₹100 (a flat trade), so the turnover on each side is ₹6,500. Charges, excluding slippage, using the schedule above:
| Premium traded | STT before | STT after | All charges before | All charges after |
|---|---|---|---|---|
| ₹100 (turnover ₹6,500 a side) | ₹6.50 | ₹9.75 | ₹59.30 | ₹62.50 |
| ₹200 (turnover ₹13,000 a side) | ₹13.00 | ₹19.50 | ₹71.40 | ₹77.90 |
Per trade, the rise adds ₹3 to ₹7. Notice what dominates the bill: flat brokerage, GST and the exchange fee make up most of the ₹60 to ₹78, and STT is a small slice. For a casual trader this is a minor change.
Where it bites: frequency and turnover
The extra STT scales with premium sold. Consider a trader who sells premium worth ₹50 lakh a month (summed over all sells):
| Monthly sell premium | STT at 0.10% | STT at 0.15% | Extra per month | Extra per year |
|---|---|---|---|---|
| ₹10 lakh | ₹1,000 | ₹1,500 | ₹500 | ₹6,000 |
| ₹50 lakh | ₹5,000 | ₹7,500 | ₹2,500 | ₹30,000 |
| ₹2 crore | ₹20,000 | ₹30,000 | ₹10,000 | ₹1,20,000 |
The tax is 50% higher, whatever the volume. If your strategy's edge was 0.3% of premium traded, a rise of 0.05 percentage points takes a sixth of it before any other cost.
Futures: the bigger proportional jump
For futures, STT went from 0.02% to 0.05% of the sell-side value: a 2.5 times increase. One Nifty futures lot at an index level of 25,000 and a lot of 65 has a notional of ₹16.25 lakh:
| Item | Before | From 1 April 2026 |
|---|---|---|
| STT on selling one lot (₹16.25 lakh) | ₹325 | ₹813 |
| Extra STT per round trip | ₹488 per lot | |
A short-term futures strategy that holds a lot for a day and aims for a few hundred rupees now pays a visibly larger share to the exchange and the government.
What it does to strategies we tested
- Intraday option sellers with tight stops. In our back-test of an EMA-based Nifty option seller, charges were about ₹130 per trade on one lot (including a higher assumed brokerage); gross result was already negative. The STT change makes a bad result a little worse; it does not rescue it. Details in selling Nifty weekly premium on EMA signals.
- High-turnover stock-futures long/short. Our pre-registered test found the break-even slippage fell to 0.18% to 0.28% a cycle once whole lots and charges were counted: see break-even slippage. A bigger STT narrows that margin further.
- Overnight option sellers. Charges are paid once per night, so the cost base is lower, but real fills still cost more than the model suggests: overnight strangles.
How to use this
- Write your all-in cost per round trip in rupees and as a percent of premium or notional, using your broker's current schedule.
- Compute your strategy's average gross profit per trade. If it is below about twice the all-in cost, it will not survive a bad month.
- Re-run any old back-test with the rates in force on each date: a result built on pre-April-2026 costs overstates what a new trader can earn.
- Stress-test at 2x and 3x costs. An edge that disappears at 2x costs is within the error of the cost estimate.
Limits and sources
Figures above are examples, not a quote of your costs: brokers differ, and the exercise-side STT, delivery charges, taxes on income and clearing member fees are outside this article. We used published budget coverage and broker notices to confirm the 1 April 2026 rates; read the exchange circulars and your contract notes for the binding position. Our cost model is the same one used in all studies on the Strategy Review.