Budget 2024-25: Investors Ride Waves Of Joy And Disappointment

The Demands Of TimeThe market had actually anticipated the significant increase in STCG tax from 15 per cent to 20per cent. Madhavi Puri Buch, chairman, the Securities and Exchange Board of India (Sebi) had, in fact, expressed her concerns about the derivatives market overheating. Earlier on July 19, 2024, Buch had expressed concerns about household financial savings being used for speculative bets rather than capital formation. A week earlier, Sebi had appointed an expert group on exchange-traded derivatives and proposed increasing lot sizes of futures and options from the current Rs 5 lakh to Rs 25 lakh, to curb retail participation in the future and option (F&O) segment. The increase in securities transaction tax (STT) on sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price was seen as a measure to curb F&O trading. Such a measure was widely anticipated when the finance minister tabled the Economic Survey 2024 in Parliament on July 22, 2024. The survey highlights that derivatives trading holds the potential for significant gains, appealing to the gambling instincts of individuals and can augment income if profitable. However, it warned that, globally, derivatives trading mostly results in financial losses for investors.

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