Budget 2024: Indian stock market benchmarks, the Sensex, and the Nifty 50, plunged almost 2 per cent each as Union Finance Minister Nirmala Sitharaman proposed to increase STT and LTCG taxes in her Budget speech. The BSE’s 30-share index Sensex dropped over 1,200 points, or 1.6 per cent to a low of 79224.41 during intra day trades and NSE’s Nifty fell 435.09 points, or 1.77 per cent to a day’s low of 24,074.2. However, both the indices recover later.

Budget 2024: Indian stock market benchmarks, the Sensex, and the Nifty 50, plunged almost 2 per cent each as Union Finance Minister Nirmala Sitharaman, in her Budget 2024 speech, proposed increasing taxes on market gains, dealing a blow to expectations that the government may leave them unchanged.

Domestic stock market indices, the Sensex and the Nifty fell over 1.5 per cent in afternoon trades after Finance Minister Nirmala Sitharaman announced to hike the securities transaction tax (STT) on futures and options (F&O) segment and long-term capital gains (LTCG) on financial and non-financial assets.

The BSE’s 30-share index Sensex dropped over 1,200 points, or 1.6 per cent to a low of 79224.41 during intra day trades and NSE’s Nifty fell 435.09 points, or 1.77 per cent to a day’s low of 24,074.2. However, both the indices recover later.

While announcing the Union Budget 2024-25, Sitharaman proposed to increase the STT on futures and options of securities to 0.02 per cent and 0.1 per cent, respectively.

STT is a direct tax levied on purchase and sale of securities that are listed on stock exchanges. Earlier, the STT on sale of futures in securities was 0.0125 per cent. The tax on sale of an option in securities was 0.0625 per cent (on seller) and on sale on an option in securities, where option is exercised was 0.125 per cent (on purchaser)

The increase in STT on F&O comes as surge in volumes in the segment has worried market regulator Securities and Exchange Board of India (SEBI) and the Reserve Bank of India.

Sitharaman also proposed to increase long-term capital gains on all financial and non-financial assets to 12.5 per cent from 10 per cent earlier. She said short term capital gain tax on certain financial assets will attract a tax rate of 20 per cent, while that on all other financial assets and non-financial assets shall continue to attract the applicable tax rate.

MUMBAI: Stock markets turned highly volatile amid the Union Budget presentation on Tuesday.

The 30-share BSE Sensex jumped as soon as Finance Minister Nirmala Sitharaman began presenting the Budget for 2024-25. However, within minutes, it slipped into the red and later traded flat, down 38.17 points at 80,457.02 at 11:41 hrs.

The NSE Nifty also ticked higher as the Finance Minister began the presentation of her seventh Union Budget in the Lok Sabha. However, volatile trends soon emerged, and the benchmark traded 18.25 points lower at 24,491. The BSE benchmark had climbed 264.33 points to 80,766.41 in early trade, while the Nifty went up 73.3 points to 24,582.55.

This is the first Budget during Prime Minister Narendra Modi-led government’s third term in office. “India’s economic growth continues to shine while the global economy is still in the grip of policy uncertainty,” Sitharaman said. She noted that the country’s inflation continues to be stable and is moving towards 4 percent, with core inflation standing at 3.1 percent.