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Charges which you need to pay for Trading in stock market

There is a number of charges involved while trading in India i.e. buying or selling of shares. Some of them are common like brokerage charge & STT, while there are many whom the investors are not aware of. In this article, we are going to explain all of the different charges on share trading. This typically includes:

  • Brokerage Charges /Fees
  • Securities Transaction Tax (STT) / Commodity Transaction Tax (CTT)
  • Transaction Charges (Stock Exchange + Clearing Member)
  • GST
  • SEBI Charges
  • Stamp Duty
  • Depository charges.
  • AMC or Opening charges
  • Income Tax

Brokerage Fees:

This is the biggest charge which you need to pay while transacting in the stock market but now a day's because of discount brokers these charges have been reduced considerably.

Brokerage fees would depend on many variables, like the type of your Broker (Full Service Brokers, Discount Broker), Type of Trade (Delivery based, Intra-Day trading, trading in Futures, Options).

  • Typically brokerage fees charged by the full service brokers (ICICI Direct, HDFC Securities, Sharekhan, Motilal Oswal) would be higher than the Discount Brokers (Zerodha , Upstox , Pro-stock) as they also provide a lot of other services like research and advisory, tips on stock etc and would normally charge in % to trade. In general, a full-service broker charge between 0.01% - 0.50% brokerage charge on Intraday and delivery trading.
  • The discount brokers charge a flat fee (fixed fee of Rs 10 or Rs 20 per trade) irrespective of the order value on intraday and delivery trading. There are some discount brokers who do not charge any fee on delivery trading (like Zerodha, Upstox).
  • It is worthwhile to note that brokerage charge would need to be paid on both times of trading i.e. while buying a share and selling a share.
  • Intraday Trading would typically attract lesser brokerage charges v/s Delivery trading but it is worthwhile to note that some discount brokers are offering the delivery trading at Zero brokerage like Zerodha, Upstox etc.

Security Transaction Tax (STT):

Transactions which you do in stock market attract Security transaction tax levied by the GOVT.

  • Intraday & F&O Trades : STT is charged only on the sell side.
  • For delivery trading: STT is charged on both sides (buy & sell) of trading.
  • Bonds, Currency, and Mutual funds : No STT .

Trade

Security Transaction Tax

Equity Delivery

0.1% on buy & sell

Equity Intraday

0.025% on the sell side

Equity Futures

0.01% on sell side

Equity Options

0.05% on sell side (on premium)

Currency Futures/Options

No STT

Commodities Futures

0.01% on sell side (Non-Agri)

Commodities Options

0.05% on sell side

Transaction Charges:

  • These charges are basically charged by the stock exchanges. Transaction charges are charged on both sides of the trading (buy & Sell ) and are same for both intraday & delivery.
  • National stock exchange (NSE) charges a transaction fee of 0.00325% of the total amount.
  • Bombay stock exchange (BSE) charges a transaction fee Flat Rate per Trade Rs. 1.50. * Transaction charges for group A, B, and other non-exclusive scrips at a flat rate on trade count basis. Existing 275 per /crs, If the scrip is exclusive.

Segment

NSE

BSE

Equity Intraday

0.00325% on Turnover

Rs.1.50 each on buy trade & sell trade

Equity Delivery

0.00325% on Turnover

Rs.1.50 each on buy trade & sell trade

Equity Futures

0.0021% on Turnover

Rs.1.50 each on buy trade & sell trade

Equity Options

0.053% on Turnover

Rs.1.50 each on buy trade & sell trade

Currency Futures

0.00135% on Turnover

NA

Currency Options

0.044% on Turnover

NA

Commodities Futures

Non-Agri: 0.0036%

Agri: 0.00275%

Commodities Options

0.05% on the sell side

GST:

The tax levied by the government on the services rendered this would be charged @ 18% of (brokerage + transaction charges).

SEBI Charges:

Charged at Rs.15 per crore by Securities and Exchange Board of India for regulating the markets.

Stamp Duties:

This is charged by the state government. Different states have different stamp duty. Depending on the state of the client's correspondence address this tax is applied.

No.

State

EQ Intraday

EQ Delivery

Futures

Options

Currencies

Commodities

1

Andhra Pradesh

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

2

Arunachal Pradesh

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

3

Assam

0.018% - max Rs. 49.5/day

0.018% - max Rs. 49.5/day

0.018% - max Rs. 49.5/day

0.018% - max Rs. 49.5/day

0.018% - max Rs. 49.5/day

0.018% - max Rs. 49.5/day

4

Chhattisgarh

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

5

Delhi

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

6

Goa, Daman & Diu

0.01%

0.01%

0.01%

0.01%

0.01%

0.01%

7

Gujarat

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

8

Haryana

0.002% - max Rs. 500

0.01% - max Rs. 500

0.002% - max Rs. 200

0.002% - max Rs. 200

0.002% - max Rs. 200

0.002% - max Rs. 500

9

Kerala

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

10

Karnataka

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

11

Madhya Pradesh

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

12

Maharashtra

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

13

Meghalaya

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

14

Orissa

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

0.005% - max Rs. 50/day

15

Rajasthan

0.00%

0.01%

0.00%

0.00%

0.00%

Agri: 0.0006%

Non Agri: 0.0012%

16

Tamil Nadu

0.01%

0.01%

0.01%

0.01%

0.01%

*30 paisa for every unit of Cotton, Kapas, Pods

*10 paisa for every unit of Kilo of Silver

*50 paisa for every unit of Kilo of Gold

*50 paisa for every unit of 25 Metric tones of Groundnut, Lineseed, Castor Seed, Cotton Seed

*For any Yarn,non mineral oil, spices, Hydrosulphide soda: 0.004% *No Stamp Duty for Crude Oil and Base Metals

17

Telangana

0.01% - max Rs. 100/day

0.01% - max Rs. 100/day

0.01% - max Rs. 100/day

0.01% - max Rs. 100/day

0.01% - max Rs. 100/day

0.01% - max Rs. 100/day

18

Uttar Pradesh

0.002% - max Rs. 1000/day

0.002% - max Rs. 1000/day

0.002% - max Rs. 1000/day

0.002% - max Rs. 1000/day

0.002% - max Rs. 1000/day

0.002% - max Rs. 1000/day

19

West Bengal

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

20

Other State

0.00%

0.01%

0.00%

0.00%

0.00%

0.00%

Depository Participant (DP) Charges:

  • NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) are the two stock depositories in India.
  • Whenever you buy a share, it is kept in a digital form with the depository. These services provided by the depositories are chargeable and they normally charge some fixed amount for that.
  • Individual investor can not directly go and open account with these depositories, they would need to open account with the depository participant. Here, the brokerage firm / Bank where you have opened your demat account would work as the depository participant (DP).
  • DP acts as an interface between the depository and stock market as the investors cannot approach depository & Stock market directly. So, overall the depository would get money from the depository participant and then the depository participant (DP) would get money from the investors.
  • DP charges are a usually flat of between Rs 10 to 35 depending on your broker and this is also charged only for delivery trading (not for intraday or derivative).

Account opening & AMC charges

Trading Account / Demat opening charges are a one-time fee that Broker would charge to initiate your account opening process. Trading /Demat AMC (Annual maintenance Charges) is an annual fee charge by Brokers to maintain your account, this is annual charges and would be getting deducted from your account even if you haven't traded for a year. All these charges would vary from broker to broker.

Income Tax:

According to the Income Tax Act, these transactions are separately assessed under different heads depending on the nature, quantity, and purpose of entering into these transactions.

For example, if a person intends to hold shares for investment purposes then it will be assessed under the head Capital Gains however if a trader deals in financial instruments it will be assessed as Business Income. Intraday termed as speculative business Income, Derivatives trading also termed as normal business income. If you do the delivery based trading then the below-mentioned chart would explain about tax treatment.