STT or security transaction tax was introduced in 2004 when Long term capital gain tax (LTCG or tax paid on any gains from stocks which are held for more than 1 year) was removed by the then finance minister P M Chidambaram. STT since it is collected upfront by the exchanges is so much more easier for the government to collect than LTCG which requires investors to voluntary declare and pay. In the budget of 2018, LTCG of 10% for gains over Rs 1lk was introduced, but STT wasn’t reduced.
For like 15+ years now, first as a trader and now as a broker, every budget day I get up hoping that STT is removed or reduced, but if anything it has only gone up. 
For very active traders, STT is a very high cost. In terms of transaction taxes, we are probably among the top few markets in the world.
Historical STT in India
| STT - Security transaction tax on Equity & Equity derivatives (in %) | |||||
|---|---|---|---|---|---|
| Date | Cash Delivery | Cash Intra-day | Futures | Option | Exercised Options (contract value) |
| Charged | Buy and Sell | Only sell | Only sell | Only sell | All |
| 1st Oct 2004 | 0.075 | 0.015 | 0.01 | 0.017 (contract value) | 0.01 |
| 1st June 2005 | 0.1 | 0.02 | 0.0133 | 0.017 (contract value) | 0.0133 |
| 1st June 2006 | 0.125 | 0.025 | 0.017 | 0.017 (contract value) | 0.017 |
| 1st June 2008 | 0.125 | 0.025 | 0.017 | 0.017 (premium value | 0.125 |
| 1st June 2013 | 0.1 | 0.025 | 0.01 | 0.017 (premium value) | 0.125 |
| 1st June 2016 | 0.1 | 0.025 | 0.01 | 0.05 (premium value) | 0.125 |
| CTT- Commodity transaction tax on Commodity & Commodity derivatives (in %) | ||||
|---|---|---|---|---|
| Date | Futures (sell) | Options (Sell - premium value) | Sale of an Exercised Option (contract value) | |
| 1st July, 2013 | 0.01 | 0.05 | 0.0001 |
No STT on Currency derivatives
Taxes paid by Zerodha customers
If you add up STT, Stamp duty, & GST, customers of Zerodha end up paying ~Rs 200 crores a month or ~ Rs 2500 crores a year in transaction taxes. This is outside of the income tax (10% for LTCG over Rs 1lk, 15% for STCG, and as per income tax slabs for intraday & F&O) that has to be paid on any gains. Of course the last year has been a much more active year as well, it would have been much lower before 2020.
Impact of transaction tax on customers
Transaction costs eat up into the trading capital. If you add impact costs to this (money lost due to bid-ask spread), I think most active traders lose more money to transaction tax + Impact cost than to the markets. So lesser transaction tax is definitely good for customers, not only directly but also indirectly as lower transaction tax increases liquidity and hence reduce the impact cost as well.
The counterview to the above is that lower costs can also get customers to trade more often and frequently, leading them to take higher risks, which may not be good as well.
Impact of STT on trading behavior
We had mentioned this in the post you shared,
Until 2008, trading was mostly in futures, but it is mostly options today. The interest in options shot up once the minimum contract value for F&O went up from Rs 2L to Rs 5L around Nov 2015, which meant that small traders who didn’t have sufficient margin to trade futures shifted to trading options. STT for options trading reducing from STT on Strike+Premium to only Premium from 2008 also helped. This trend has only continued after the restriction of intraday leverages on margins in 2020.
While increases in margins for futures and equity have definitely helped the popularity of options trading, there is also a section of market participants who believe that STT being lower for options as compared to futures or stocks is the reason as well. As you can see from the table shared above, STT for options was reduced (rightly so) from contract value to premium value in 2006. While the big bump in options trading started only in 2015 when minimum contract value went up F&O contracts, it had started trending up from 2007 when STT for options was reduced. Btw, no STT hasn’t really caused trading volumes in currency derivatives to shoot up.
Here is hoping that STT reduces this budget. 
