People Losing Hard-Earned Money: Sources On Hiked Securities Transaction Tax

As the Sensex and Nifty tumbled by over 1,500 points and 500 points after the Union Budget on Sunday, sources said the reaction was a result of the increase in the Securities Transaction Tax on Futures and Options.

In a briefing after the Budget was presented, Revenue Secretary Arvind Shrivastava said the intent to increase the Securities Transaction Tax (STT) was aimed at curbing excessive speculation. Sources said the Centre wants to discourage this kind of trading because people are losing their hard-earned money through speculation.

One of the other reasons that the markets took a hit was because investors felt Finance Minister Nirmala Sitharaman had not announced any policies specifically for the defence sector. The sources pointed out that Rs 7.84 lakh crore has been set aside for the sector, up from Rs 6.81 lakh crore last year - an increase of 15%. Additional funds, they said, have also been allocated, keeping future requirements in mind. 

The first part, Part A, of the Budget is generally longer, but Part B was more detailed this year. "This is because the budget is not limited to the upcoming financial year but presents a vision for 2047," said a source. 

On taxation, the sources said the Budget provides clarity and a roadmap. 

"By 2030, all taxpayers may shift to the new income tax regime. According to current figures, this number is approximately 81%," the source said. 

The Centre and the finance minister also, the sources said, focused on sectors hit by US President Donald Trump's tariffs, including the textile sector.

'Trust In Policies'

The sources recalled that, in Sunday's cabinet meeting, PM Narendra Modi specifically mentioned that for the first time in independent India, a female finance minister is presenting the budget for the ninth consecutive time under the same Prime Minister.

While finance ministers have presented multiple budgets before, a single finance minister presenting the budget consecutively for nine years is a significant achievement, he said, adding that this demonstrates the public's trust in the government's policies and their continuity.