Even as markets regulator Securities Exchange Board of India (SEBI) had indicated earlier this month that it was concerned about the rapid growth in India’s derivatives trading market, no one anticipated the big changes for short-term and long-term capital gains that the finance ministry would come down hard on the futures & options trading and securities markets in India in the Union Budget 2024.

Earlier today, finance minister Nirmala Sitharaman hiked the short term and long term capital gains tax on financial and non-financial assets.

The LTCG has been hiked from 10% to 12.5% whereas the STCG tax on some assets will be 20% now. Further, the securities transaction tax (STT) has hiked from 0.062% to 0.1% on options trading and from 0.0125% to 0.02% on futures trade.

These announcements did not jolt the stock markets heavily, but analysts reckon there may be a dramatic turn in the coming weeks as investor sentiments have certainly been impacted by the changes.

Sonam Srivastava, CEO and founder of investment research firm Wright Research, said that the announcements have sent some shockwaves in the derivatives markets, particularly among short-term traders who look to book........

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