Financial Changes From 1st October 2024: From Tuesday, October 1, 2024, those who trade in derivatives trading i.e. futures and options of the stock market are going to get a blow. While presenting the full budget for the financial year 2024-25 on July 23, 2024, Finance Minister Nirmala Sitharaman has increased the Securities Transaction Tax on Future and Option Trading (F&O Trading). It is going to be implemented from October 2024.
Huge loss on F&O trade
On September 23, 2024, stock market regulator SEBI released a report stating that in the last three years, 1.13 crore investors trading in futures and options have suffered a loss of Rs 1.81 lakh crore. Whereas in 2023-24, investors have suffered a loss of Rs 75000 crore in a single year. In such a situation, to discourage investors from trading in futures and options, a decision was taken in the budget to increase the securities transaction tax on F&O trading. In 2023-24, each investor has suffered an average loss of Rs 1.20 lakh. There are only 7.3 percent investors who have made profits from trading in F&O.
More STT will have to be paid on F&O trades
According to the budget proposal, STT on option contracts has been increased from 0.0625 percent to 0.1 percent. So the rate on futures contracts has been increased from 0.0125 percent to 0.02 percent. Obviously, due to this decision, traders who trade in futures and options will have to pay more securities transaction tax than before.
Strong surge in derivatives trading in last 4 years
From the Finance Minister to SEBI Chief Madhabi Puri Buch have expressed concern over the increasing participation of retail investors in derivatives trading and the loss of their hard-earned money. The Economic Survey presented this year has also expressed concern about derivatives trading and said in the survey that there is no place for derivatives trading in developing countries. The increasing participation of retail investors in derivatives trading can be gauged from the fact that the total turnover in March 2019 was Rs 219 crore, which has increased to Rs 8740 crore in March 2024.
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