Zerodha co-founder Nithin Kamath has voiced concerns over repeated increases in Securities Transaction Tax (STT), arguing that the hikes are eroding trading activity despite initial resilience in bull markets.
In a candid social media post, Kamath outlined that the STT was introduced when the long-term capital gains (LTCG) tax was nil. However, the STT keeps on rising in every Budget despite the return of LTCG.
“As a market participant, I always hope the budget will reduce STT, but it keeps going up. STT was introduced when LTCG (Long-Term Capital Gains) was made 0, but now that LTCG is back…,” he said.
As a market participant, I always hope the budget will reduce STT, but it keeps going up. STT was introduced when LTCG was made 0, but now that LTCG is back… ????
The 60% F&O STT increase from Budget 2024 (0.0125% → 0.02% on futures and 0.0625% → 0.1% on options) didn’t impact…
— Nithin Kamath (@Nithin0dha) January 30, 2026
He underscored Budget 2024’s sharp 60% hike in STT on F&O trades, from 0.0125% to 0.02% on futures and 0.0625% to 0.1% on options. It initially failed to dent volumes amid a roaring bull run and rising participation. However, the true fallout emerged in the subdued market conditions of the past year, Kamath observed.
“But markets don’t always have bull runs; the impact showed up in the year we just had,” he wrote.
Government projections pegged STT collections for FY 2025-26 at Rs 78,000 crore. Yet, as of Jan. 11, realisations stood at around Rs 45,000 crore. Even factoring in an estimated Rs 12,000 crore by March 31, the total would hit just Rs 57,000 crore, nearly 25% short of the target.
“I think the government would’ve collected a lot more without the 2024 hike,” Kamath wrote.
Concluding the post, Kamath said, “BTW, the Budget is on a Sunday this time, and markets are open. We’re one of the few brokers that allow BTST trades on Sunday, and you won’t get same-day NAV when buying MFs on Sunday.”
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Budget 2026 On Sunday
For the first time in more than two decades, the Union Budget is set to be presented on a Sunday. On Feb. 1, Union Finance Minister Nirmala Sitharaman is scheduled to table the government’s annual financial statement in the Lok Sabha at 11 a.m.
Stock exchanges NSE and BSE have announced special trading sessions on Sunday to accommodate the Budget.
As per the NSE circular, the pre-open market operates from 9 AM to 9:08 AM, followed by normal trading between 9:15 AM and 3:30 PM.
A similar circular from BSE declared the day as a “special trading day” with regular market hours.
This will be the second time in the history of Independent India when stock markets will be open for trading on a Sunday. The last time such an instance was on Feb. 28, 1999, under the Atal Bihari Vajpayee government.
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