STT on Options 2026: New F&O Rates and What They Cost

Last updated: 8 Oct 2026 · 9 min read

By Pulkit Mangal — F&O trader since 2017, founder of TradeDiary. Past trading experience across Zerodha, Kotak and Dhan; built TradeDiary after losing ₹14L in 2021 to mistakes a journal would have caught.

TL;DR: Since 1 April 2026, STT on options is 0.15% of the premium on the sell side, STT on futures is 0.05% on the sell side, and an option you bought and let get exercised pays 0.15% of its intrinsic value. Equity delivery and intraday rates did not change. Futures traders took the biggest hit — the rate went up two and a half times.

You placed the same NIFTY trade you have placed a hundred times. Same lots, same premium, same exit. The contract note says the charges were higher. Nothing about your trading changed in April 2026 — the tax underneath it did.

Securities Transaction Tax is the one charge on your contract note you cannot negotiate, cannot shop around for, and pay whether the trade made money or not. The Union Budget 2026-27 raised it on every F&O product, and NSE's circular NSE/FATAX/73524 put the new rates into effect from 1 April 2026. If you trade frequently, it is now a line item worth understanding properly.

💡 Short on time? Try the free F&O journal — it works out STT on every trade at the rate that applied on that trade's date.

1. What "STT on options 2026" actually means

STT is a tax the government levies on the value of securities transactions done on an exchange. Your broker collects it and passes it on; it shows up as a separate line on every contract note.

Here is how the F&O rates have moved over the last two Budgets:

Three things about this table trip up Indian traders more than anything else:

1. It is charged on the sell side only. Buying an option to open costs no STT. Selling it to close does. For an option writer, the sell is the opening trade — so the seller pays STT on day one, before knowing whether the trade will work.
2. It is charged on premium, not profit. A trade that loses money pays exactly the same STT as one that makes money, because the tax is on the value of what you sold.
3. The trade date decides the rate. A trade done on 31 March 2026 pays 0.1%; the same trade on 1 April pays 0.15%. The 2026 change landed exactly on a financial-year boundary, but the 2024 one did not — FY 2024-25 had two option rates (0.0625% until 30 September, 0.1% after) — and any rolling 12-month view today mixes 0.1% and 0.15%. One rate applied to a whole period is wrong whenever that period crosses a change.

2. Why it matters more than it looks

Scalpers feel it first

On a single NIFTY option trade, 0.15% sounds negligible. But STT is a cost on turnover, and profit is a small fraction of turnover. A buyer who sells 130 NIFTY options at ₹85 pays ₹16.58 of STT on that exit. If the trade made ₹6 a unit — ₹780 — STT alone took 2% of it. Do that 600 times a year and the arithmetic stops being trivial.

Option sellers pay up front

Because writers sell to open, their STT is paid at entry on the full premium collected. A short strangle that is stopped out at a loss has still paid STT on the premium it took in. Sellers who measure "premium captured" without subtracting STT overstate their edge.

The old expiry trap has mostly closed

For years, letting an in-the-money option you had bought get exercised was a classic mistake: STT on exercise was charged at 0.125% of the intrinsic value, against 0.0625% on the premium if you had simply sold it — twice the rate. Since 1 April 2026 both are 0.15%. On a deep in-the-money option, where premium and intrinsic value are almost the same, the difference is now a few rupees.

It has not vanished entirely. The exercise charge is on intrinsic value; the square-off charge is on premium. And stock options are physically settled in India — an in-the-money stock option at expiry turns into a delivery obligation, which brings delivery-side charges and a margin requirement of its own. Squaring off before expiry is still the cleaner choice for most stock option positions.

Futures took the biggest jump

Futures STT went from 0.02% to 0.05% — two and a half times. One NIFTY futures lot (65 units at 22,650) is a contract value of about ₹14.7 lakh, so every sell now pays ₹736 of STT instead of ₹294. Traders who use futures to hedge an options book, or who roll positions every month, will see this line grow faster than any other.

It is a business expense — if you record it

F&O income is non-speculative business income, and Section 36(1)(xv) of the Income Tax Act lets you deduct STT paid on transactions whose income is taxed as business income. The deduction is only as good as your record of it. A P&L summary that shows one lumped "charges" figure — or none — leaves money on the table at filing time. (More on the tax side in Options trading tax India.)

3. What to record for every F&O trade

To know your true STT cost — and to claim it — each trade needs these fields:

Optional but useful: the underlying, the expiry date, and STT as a percentage of gross profit for each strategy.

4. How to calculate STT on any F&O trade

1. Check the trade date. On or after 1 April 2026, use the new rates. Before that, use the regime in force on that day.
2. Identify the taxable leg. Only the sell is taxed — the closing sell for a buyer, the opening sell for a writer, every sell for futures.
3. Work out the value. Options: premium × quantity. Futures: traded price × quantity. Exercised options: (settlement price − strike, for calls; strike − settlement price, for puts) × quantity.
4. Apply the rate. 0.15% for options sold, 0.05% for futures sold, 0.15% of intrinsic value for options bought and exercised.
5. Compare with your contract note. Exchanges round STT, and brokers sometimes aggregate it per order, so your figure may differ by a rupee. A bigger gap is worth a question to your broker.
6. Record it against the trade, not the day. A day-level total is fine for a sanity check and useless for working out which strategy is paying the most tax.

If you'd rather not do this by hand, the Indian brokerage calculator applies the 2026 STT rates alongside brokerage, exchange charges, GST and stamp duty.

5. A real example with numbers

Take Meera, 34, a product manager in Pune who trades with ₹6L of capital alongside her job. She sells NIFTY weekly options, buys BANKNIFTY options on trend days, hedges with NIFTY futures, and occasionally lets an in-the-money option expire. Here is her year of sell-side turnover, priced under the old and new rates:

Meera's gross trading profit for the year was ₹2,40,000. Under the old rates, STT took 7.5% of it. Under the 2026 rates it takes 16.1% — before brokerage, exchange charges, GST and stamp duty are counted at all.

The insight was not where she expected it. Her option selling, the strategy she worried about, added only ₹1,920. 85% of the increase came from the futures hedges — positions she thought of as insurance, not as trades. Futures STT is paid on every sell, so the number of rolls drives it directly: hedging with fewer, longer-dated rolls cuts the line without changing what the hedge protects.

She could only see that because her journal had STT recorded per trade and grouped by strategy. Her broker's annual summary showed one number.

6. Common mistakes

1. Using one STT rate for a whole period — FY 2024-25 had two option rates, and any 12-month window today has two; price each trade at the rate on its own date.
2. Measuring option-selling edge on gross premium — subtract the STT paid at entry, or the strategy looks better than it is.
3. Forgetting that futures are taxed on contract value — 0.05% of ₹14.7 lakh is a real number; track it per roll.
4. Assuming exercise is always the expensive path — at 0.15% each it now rarely is for index options, so decide on liquidity and slippage, not on old STT folklore.
5. Letting stock options expire in the money by accident — physical settlement brings delivery obligations and their own charges.
6. Not claiming STT as a business expense — Section 36(1)(xv) allows it against F&O business income; you need the record to claim it.

7. How TradeDiary helps

TradeDiary imports your broker statement — Zerodha, Upstox, Kotak, Dhan, Angel One and others — and keeps every F&O leg with its charges split by head, including STT. Where a file has no charges in it, the app estimates them at the rate that was in force on each trade's date, so trades either side of 1 April 2026 are priced correctly. Because the charges sit on each trade rather than in a yearly total, you can see what each strategy actually pays — which is how a line like Meera's futures hedges becomes visible.

Start a free F&O journal →

You may also like: Options trading tax India · F&O tax journal · ITR-3 for traders · Options trading journal India

Frequently asked questions

What is the STT on options in 2026? From 1 April 2026, STT on options is 0.15% of the premium, charged on the sell side only. If an option you bought is exercised, STT is 0.15% of its intrinsic value. The rate was 0.1% on premium and 0.125% on exercise before that date.

Do option buyers pay STT? Not when they buy. A buyer pays STT only when selling the option to close the position, at 0.15% of the sell premium — or, if the option is exercised at expiry, at 0.15% of its intrinsic value.

What is the STT on futures from April 2026? 0.05% of the contract value, on the sell side only. It was 0.02% before 1 April 2026, so the rate went up two and a half times. One NIFTY lot sold near 22,650 now pays about ₹736 of STT.

Did STT change for equity delivery and intraday in 2026? No. Equity delivery remains 0.1% on both buy and sell, and intraday equity remains 0.025% on the sell side. The Budget 2026-27 changes applied to futures and options only.

Can F&O traders deduct STT from taxable income? Yes. F&O income is non-speculative business income, and Section 36(1)(xv) of the Income Tax Act allows STT paid on transactions taxed as business income to be deducted. You need a record of the STT actually paid, which your contract notes and a trade-wise journal provide.

Risk disclaimer

Trading in derivatives carries substantial risk. SEBI's January 2024 study found that 9 out of 10 individual traders in the equity F&O segment lost money, with average losses of ₹50,000 over FY22. (SEBI study, 25-Jan-2024)

STT rates are as announced in the Union Budget 2026-27 and notified by NSE (circular NSE/FATAX/73524, effective 1 April 2026), as summarised in Zerodha's bulletin and ICICI Direct's explainer. This article is general information, not tax advice — rates change with Budgets, so check your contract notes and consult a chartered accountant before filing. Nothing here is investment advice.

Pulkit Mangal trades F&O on Indian markets and builds TradeDiary, a trading journal made for the Indian F&O trader.

Last updated: 8 Oct 2026.