This comes as markets attempt to recover some losses after bears dominated Dalal Street in March, as the prolonged conflict in the oil-rich Middle East keeps oil prices elevated and spooks investors.
Let’s take a look at the six key changes set to take place from April 1 amid these uncertainties.
1) STT on F&O jumps
While announcing the Union Budget in February this year, Finance Minister Nirmala Sitharaman proposed raising the Securities Transaction Tax (STT) on futures to 0.05% from 0.02%, and on options premiums to 0.15% from 0.10%. The levy on options exercise was proposed to be increased to 0.15% from 0.125%. The increased STT rates are set to take effect from April 1.
The government said the hike was aimed “to provide reasonable course correction in the F&O segment in the capital market and generate additional revenues for the government”. Market participants have warned that the cumulative increase in STT could raise impact costs for traders and reduce liquidity in the derivatives market.
2) No interest deductions on dividends
Taxpayers file income from dividends under the ‘Income from other sources’ section when filing their taxes. Previously, any interest paid to banks for earning such dividend or interest income could be claimed as a deduction. However, Budget 2026 removed the provision allowing interest deduction while computing dividend income and income from mutual funds.This will impact investors who use borrowed funds or margin financing for equity or mutual fund investments. Earlier, interest costs could partially offset taxable income. Now, post-tax returns may fall, making leveraged investing less attractive for small investors.
3) Buyback taxation rejig
Finance Bill 2026 introduced a uniform 12% surcharge on capital gains from share buybacks, but this applies only to promoters. Retail investors largely remain unaffected.
According to JM Financial, this will likely affect company founders, key directors, controlling shareholders and others.
4) Gold and silver ETFs to track domestic spot prices
SEBI in February asked funds to use domestic stock exchange spot prices to value physical gold and silver held by exchange-traded funds (ETFs), effective April 1. Fund houses earlier used London Bullion Market Association prices to value physical gold and silver held by mutual fund schemes.
“…it was deliberated that polled spot prices published by recognised stock exchanges may be used for the valuation of gold and silver held by mutual fund schemes. As stock exchanges are subject to transparency and compliance requirements under the regulatory framework, using the spot price published by such regulated entities shall lead to a valuation reflective of domestic market conditions and also ensure uniformity in the valuation practices,” SEBI said in a circular.
5) Sovereign gold bond benefits now limited to original investors only
The exemption from capital gains tax with respect to Sovereign Gold Bonds will now be available only where such bonds were subscribed to by an individual at the time of original issue and were held continuously until redemption on maturity.
Gains from sovereign gold bonds bought from secondary markets will continue to be taxed as capital gains.
6) Algo trading framework rejig
Retail algo trading in India has been formally structured for the first time, with exchanges now able to identify API orders separately and new rules around how strategies can be built and executed. Key changes include order rate limits, approvals beyond a certain threshold, mandatory use of static IPs and restrictions on market orders.