STT collection surges 52% in FY27 amid market volatility; direct tax growth at 13%

Securities Transaction Tax (STT) collection surged 52% in the financial year 2026-27, driven primarily by increased levies on futures and options transactions, according to tax experts. The sharp rise reflects heightened trading activity in derivative segments amid market volatility during the period.

Net direct tax collection grew 13% in FY27, showing steady growth across the broader tax base. The robust STT numbers have prompted policy analysts to revisit potential overlaps between STT and long-term capital gains tax (LTCG) structures.

Experts suggest the government may use Budget 2027 to reconsider and streamline the interaction between these two tax mechanisms, particularly given the outsized contribution from derivatives trading to overall STT revenue.