'Why is GIFT city exempt?': Aaditya Thackeray says high STT hurts financial growth in Mumbai

Union Budget 2026 | Shiv Sena (UBT) leader Aaditya Thackeray on Sunday questioned the government's decision to raise the Securities Transaction Tax (STT) on derivatives in Budget 2026, arguing that the move will hurt Mumbai's capital market ecosystem while leaving trades in GIFT City exempt.

"Why is GIFT city exempt while others are not?" Thackeray asked, as he targeted what he described as an uneven tax structure that could shift liquidity away from Mumbai.

"This Union budget shows how disconnected the Union government is from market realities and how much hate it has for Mumbai,” he said in his reaction to the Budget. "In a year which has such a volatile market environment, sky-high inflation and rupee depreciation, this selfish Union government has decided to raise STT. This clearly adds to an already burdened investor and only helps raise revenue for the government at our cost."

Thackeray argued that the tax increase comes at a time when Mumbai remains the centre of India's financial markets and trading activity. "Further, India's financial capital is home to major exchanges and maximum capital market transactions, institutional and retail participation and trading activity happens here. Higher STT directly hurts trading, discourages participation and hence curbs jobs and financial growth in Mumbai," he said.

The Sena (UBT) leader alleged that the tax structure creates an advantage for GIFT City, formally known as Gujarat International Finance Tec-City — India's first operational greenfield smart city and International Financial Services Centre (IFSC), located in Gujarat's Gandhinagar district near Ahmedabad.

"Conveniently, the same trades remain STT exempt in GIFT City," Thackeray said. "This is a blatant attempt to further snatch away Mumbai’s significance and financial leadership and move it to GIFT."

"Shockingly, same country, same investor, but different taxation incentivising movement of liquidity to GIFT, from Mumbai intentionally," Thackeray said. "Instead of giving IFSC to Mumbai and other metro cities, the union government 'gifts' Mumbai pure bias and hate!" he said, reiterating, "The key point being why is GIFT city exempt from this STT and the hike?"

In Budget 2026, Finance Minister Nirmala Sitharaman has proposed an STT hike on derivatives trading, increasing the tax on futures contracts to 0.05% from 0.02%. STT on options premium and exercise of options are proposed to be raised to 0.15% from 0.1% and 0.125%, respectively.

Defending the move at a post-budget press conference, Sitharaman said the government is not seeking to stop derivatives trading, but wants to deter retail participation in high-risk speculative activity. "This nominal increase is purely aimed at speculation, only to deter them, to discourage them. We are not against it (F&O trade), but small investors are facing losses, so how can we be quiet, so it (STT hike on F&O) is to deter such investments," Sitharaman said.