As it is trading in F&O segment of the capital markets comes with huge risk and now the pressure on this segment of traders is only set to increase as it has been proposed to levy a transaction tax of up to 10 times the existent if the F&O trade is being settled by taking physical delivery in such trades.
This is after the Bombay high Court cleared the air saying that the same STT or securities transaction tax will apply to physical settlement in case of both equities and derivatives trade. So, for a trade worth Rs. 1 crore, now the trade settling F&O contracts by taking physical delivery will now be charged Rs. 10,000 as against the earlier Rs. 1000.
The move has been made after the uncertainty that prevailed in respect of the STT liability for NSE stocks which have been shifted to compulsory delivery category from F&O segment starting July. It has been as per the SEBI's order being envisaged to soon begin physical settlement of all F&O trades.
So, henceforth as per the clarification made by the Central Board of Direct taxes there shall remain no differential when it comes to settling F&O contract by taking physical delivery or in case of a usual equity contract.