Budget 2008-09 proposes to introduce a Commodities Transaction Tax (CTT), which will be levied for all transactions carried out in commodities exchanges, whether these transactions are on options or other commodity instruments.

CTT

RATE

PAYABLE BY

Sale of an option in goods/commodity derivative(if not exercised)

0.017% on option premium

Seller

Sale of an option in goods/commodity derivative(if exercised)

0.125% on the settlement price of the option

Buyer

Sale of any other commodity derivative

0.017% of the price at which commodity derivative is sold

Seller

Thus if you are not an active player in commodities, your transaction costs will rise…..