India enacts Income-tax Act and raises STT on F&O trades
Change
India brought the Income-tax Act, 2025 into force effective April 1, 2026 and widened the simplified ITR-1 (SAHAJ) so individuals with up to two registered houses can use it.
Why it matters
Filing obligations now require taxpayers to use revised return formats that include new disclosure fields for virtual digital assets and tax-deferred employee stock ownership plans, increasing compliance detail. Market participants face higher transaction taxes on futures and options, while travel firms and remittance operators must implement changed tax-collection rules for overseas packages and certain remittances.
Implications
- • Brokerage firms' F&O trading desks must update client billing and trade systems to apply STT of 0.05% on futures and 0.15% on options premiums and option exercises before executing trades under the new rules.
- • Travel agents and tour operators must reconfigure payment and accounting systems to collect 2% TCS on overseas tour packages.
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