F&O like ‘Satta Market’ says FM Sitharaman on STT hike; rules out change in Capital Gains Tax for equity

One of the biggest talking points after the Budget speech was the hike in the Securities Transaction Tax (STT). The 150% hike in STT for F&O led to an immediate knee-jerk reaction across the equity market . Speaking on the topic, the Finance Minister Nirmala Sitharaman reiterared that the STT hike is only on the Future and Options (F&O) because people have lost as much as 90% of their investment in speculative trade Sitharaman said the tax has been increased for slightly to F&O trade as because it has become like alike ‘satta market’. “At this stage, many of them aren’t able to make good returns here. And that is why we have slightly raised the tax on the extremely risky futures and options, where it’s becoming equivalent to the satta market,with high levels of speculation,” she noted. “We’re not touching the other STTs. It is only on the futures and options,” FM Sitharaman reiterated during an exclusive interview with Financial Express. Government not considering higher capital gains tax on equities: Sitharaman Speaking about about key taxes for equity market investment, the Finance Minister ruled out any move to increase capital gains tax on equities, stating clearly that the government does not want to discourage genuine wealth creation through investments. “We’ve not even thought of increasing capital gains tax on equities,” she said. “In general, there’s a lot of concern about making high-risk activities like options and futures. That’s the limited place where we’ve tried to increase it in a small amount. But people are making and earning money out of capital gains.” She noted that “People have moved from small savings in banks and post offices into the market. People want to make money from there, which we appreciate.” Rupee finding its own level, RBI managing volatility: FM Sitharaman Nirmala Sitharaman has also commented on rupee which was on depreciating path but recovered slightly after India-US trade deal announcement. “The RBI has been intervening to contain the volatility of the currency. To a large extent, (the depreciation) also allows the rupee to find its own mark. So, we’ll have to watch it,” Sitharaman said.