Market players get mixed bag

There was some pain for investors in the stock market, with the Budget announcing an increase in the Securities Transaction Tax (STT) on options to 0.05 per cent from the existing 0.017 per cent. And, imposed an additional Dividend Distribution Tax (DDT) of 10 per cent on payout in excess of Rs 10 lakh.  Indian stock market astrology prediction

However, the increase in STT takes effect only when one sells the option and will be charged on the premium value, not the contract value. At present, STT on normal option trades done on exchanges is 0.017 per cent of the selling side of the premium value. STT on buy option positions that get exercised is 0.125 per cent of the entire contract value. There is no change in STT for the latter. For example, if you were to buy four lots of Nifty options at Rs 100 and sold these back at Rs 100, the break-even on this trade would now be Rs 100.05 instead of Rs 100.017. "This does not make any material difference to active traders but the fact that STT has been raised does not send the right signal to market participants," said Nithin Kamath, founder, Zerodha, an online discount stock brokerage.             Jackpot Stocks Trading Tips
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"On average, if one considers the daily options premium turnover for the entire market to be around Rs 3,000 crore, the overall impact of the hike in STT will be about Rs 100 crore for the entire year or Rs 50 lakh a day," said Siddharth Bhamre, head, equity derivatives and technicals, Angel Broking.

He believes the impact on high net worth individuals (HNIs, meaning the wealthy) and retail participants will be negligible. "It won't reduce trading volumes but some of the jobbers and arbitrageurs will see a slight increase in cost."  Share Market Astrology
 
The levy of a 10 per cent DDT for those earning annual dividend income of Rs 10 lakh or more is targeted mostly at promoters who pay hefty dividends and ultra HNIs. "This measure could prove counter-productive, as it might compel promoters with higher holding in companies to distribute less," said Deven Choksey, managing director,Investment Manager Personal Numerology