New Delhi: Domestic stock markets fell sharply following key announcements in the Union Budget 2026 concerning corporate buyback taxation and an increase in the Securities Transaction Tax (STT) on futures trading. By 12:30 pm, the Sensex was down 1,367 points at 80,675, while the Nifty fell 535 points to 24,785. At one point during the session, losses peaked at over 2,000 points for the Sensex and 700 points for the Nifty, reflecting sudden investor caution.
Markets, which opened flat on Sunday despite the Budget session, initially moved into positive territory. However, Finance Minister Nirmala Sitharaman’s announcements regarding the buyback tax and higher STT prompted a rapid sell-off. Investors reacted strongly to the changes, leading to a sharp drop in both indices within a short span of time.
Under the Budget measures, STT on securities trading has been raised from 0.02% to 0.05%, and STT on options premiums has been increased to 0.15%. Corporate buybacks are now taxed as capital gains, with a rate of 22% for corporate promoters and 30% for non-corporate promoters. While the move is aimed at preventing misuse of buybacks, analysts say it has significantly affected investor sentiment and market stability.