India, Feb. 1 -- The Securities Transaction Tax on futures contracts would be raised to 0.05 per cent from 0.02 per cent, Union Finance Minister Nirmala Sitharaman said in her Budget speech.

"STT on options premium and exercise of options are both proposed to be raised to 0.15 per cent from the present rate of 0.1 per cent and 0.125 per cent respectively," the Finance Minister said on Sunday.

The proposed increase in the Securities Transaction Tax (STT) on derivatives, aimed at checking excessive speculation in the futures and options (F&O) segment, is expected to increase transaction costs for active and short-term trading strategies, PTI news agency reported.

The STT is a tax charged on the value of securities traded on recognised st...