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Sitharaman proposes lower effective STT on exercise of options

Sitharaman proposes lower effective STT on exercise of options

New Delhi, July 5 (IANS) Presenting her first Budget, Finance Minister Nirmala Sitharaman announced restrictrion of Security Transaction Tax (STT) to the difference between settlement and strike price in exercise of options.

Addressing the Lok Sabha, Sitharaman said: "I propose to give relief in levy of Securities Transaction Tax (STT) by restricting it only to the difference between settlement and strike price in case of exercise of options."

STT was introduced in India in 2004.

 

Commenting on the announcement, Romesh Tiwari, Head of Research, CapitalAim, said the proposal to restrict the STT to the difference between settlement and strike price will make equity option traders happy with less tax and allow them to lock-in to the gains up to the settlement price of the option.

"We can see increased volumes in equity derivative trading in the near future," he added.

Amit Gupta, CEO of TradingBells, noted that STT levy has been streamlined, and the STT for exercised options will now be applied only to the difference between settlement and exercise price.

"That's a relief since now traders won't have to be worried about compulsorily squaring off in-the-money options before expiry," Gupta said.

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Sitharaman proposes lower effective STT on exercise of options

About Gopi Adusumilli

Gopi Adusumilli is a Programmer. He is the editor of SocialNews.XYZ and President of AGK Fire Inc. He enjoys designing websites, developing mobile applications and publishing news articles on current events from various authenticated news sources. When it comes to writing he likes to write about current world politics and Indian Movies. His future plans include developing SocialNews.XYZ into a News website that has no bias or judgment towards any. He can be reached at gopi@socialnews.xyz

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