Page 11 - Bullion World Issue 02 Volume 06 February_2026

Bullion World | Volume 6 | Issue 02 | February 2026

GIFT CITY – IFSC UNITS
• Tax holiday for IFSC units proposed to be extended to 20 consecutive years out of 25 years (from the
present 10 years out of 15 years) and is followed by a concessional 15% tax rate on business income after
the holiday period

BUYBACK TAX
• Rolling back partly the amendment brought in last year, it is proposed that buyback proceeds will be taxed
as capital gains for all shareholders (as compared to dividend which was the treatment brought in by Budget
2025). Promoters will be subject to additional buyback tax, signalling anti-abuse intent.

HIKE IN SECURITIES TRANSACTION TAX (STT) RATES FOR FUTURES AND OPTIONS
• Following the last hike in STT rates in 2024, the Budget 2026 proposes to increase the STT on future and
options as under

Transaction Type Existing STT rate Proposed STT rate Basis of Levy
Option (not exercised) 0.10% 0.15% Option premium

Option (not exercised) 0.125% 0.15% Intrinsic price

Futures 0.02% 0.05% Traded price

• It may be noted that the commodities transaction tax (CTT) has not been hiked.

KEY CHANGES IN ASSESSMENT, PENALTY AND APPELLATE PROCEEDINGS
• It is proposed to integrate assessment and penalty proceedings by issuing a common order
• Immunity from penalty and prosecution proposed to be extended to cases of misreporting, and not just
underreporting, subject to payment of additional 100% tax available for cases of misreporting as well.
• It is proposed to reduce the quantum of tax to be paid in advance/ deposited for contesting the assessment
order from 20% to 10%, calculated only on base tax demand. (Announced in the budget speech)

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