Mumbai (Maharashtra) [India], February 1 (ANI): The stock markets will absorb the changes in Securities Transaction Tax (STT) and gradually adjust, with no significant impact on the asset quality of stock brokers or exchange-listed entities, Ashish Chauhan, Managing Director and CEO of the National Stock Exchange (NSE), said on Sunday.

Speaking in an exclusive conversation with ANI, Chauhan said the increase in STT is unlikely to affect the proposed IPO of NSE or companies that are already listed.

'Overall, the market tends to absorb such changes in its own way and gradually adjusts. Going forward, the asset quality of stock brokers and exchange-listed entities will not be significantly impacted,' he said, adding that India's growth momentum is far stronger than these changes.

According to Chauhan, the country's strong economic growth will continue to attract more investors to the stock market, while investors will also explore other instruments such as futures and bonds. As a result, the hike in STT will not have any major impact on the broader market ecosystem.

Securities Transaction Tax is a small levy charged by the government on every buy or sell transaction in the stock market, including shares, futures and options. While it may appear modest, STT directly increases the cost of trading, particularly for frequent traders, hedgers and arbitrageurs.

In Union Budget 2026, the government proposed a significant hike in STT on futures and options trades. For futures contracts, STT has been increased from 0.02 per cent to 0.05 per cent. For options, STT on the premium has been raised from 0.1 per cent to 0.15 per cent, while STT on the exercise of options has also been increased to 0.15 per cent.

Commenting on tax relief measures, he said the earlier increase in TDS and TCS has now been reduced, which will be beneficial for students going abroad for education as well as for those travelling overseas for tourism or medical.

He stated 'In a way, the earlier increase in TDS and TCS has now been reduced. This will be highly beneficial for students going abroad for education, as well as for those travelling overseas for tourism'.

He also said the government is working on a framework for foreign exchange management and appears confident in extending such relaxations.

Chauhan said Union Budget 2026 is the first Budget to be presented from Kartavya Bhawan and is the Finance Minister's ninth consecutive Budget, a record that is likely to remain unmatched for a long time.

He further said the Budget focuses on maintaining fiscal discipline while boosting infrastructure-led growth. He added that the fiscal deficit has been reduced from 4.4 per cent to 4.3 per cent, with a roadmap to bring the debt-to-GDP ratio from the current 55 per cent to around 50 per cent in the coming years.

Calling it a major achievement, he said the Budget also highlights infrastructure development, including the proposed Mumbai-Pune high-speed railway and the creation of an education hub, and described it as a growth-oriented yet fiscally conservative Budget. (ANI)