Charges which you need to Pay for Trading in Stock

Market
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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 charges 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 charges would need to be paid at 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.

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Security Transaction Tax (STT):
Transactions that you do in the 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 the 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 the same for both intraday
& delivery.
The 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 a trade count basis. Existing 275 per /cr, If the scrip is exclusive.

Segment NSE BSE

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 Equity Intraday 0.00325% on Rs.1.50 each on buy trade & sell
Turnover trade

Equity Delivery 0.00325% on Rs.1.50 each on buy trade & sell

Turnover 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 NA

Turnover

Currency Options 0.044% on Turnover NA

Commodities Non-Agri: 0.0036%

Futures

Agri: 0.00275%

Commodities 0.05% on the sell-side

Options

GST:
The tax levied by the government on the services rendered 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:
Effective from 1st July 2020, The GOVT of India has implemented the changes in the
Indian stamp act 1899, The said amendment broadly provide for a centralized mechanism
for the collection of stamp duty on securities market instruments in a single place, via one
agency, and at unified rates across India, with an appropriate allocation of the tax revenue
between the state governments based on the registered office/residence of the ultimate
purchaser.

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Key Features of new stamp duty amendment
Unified rates across India
All mutual fund transactions are liable for stamp duty with standardized charges
across states.
Stock exchanges act as collecting agents for secondary market transactions in
securities, while depositories collect stamp duty in respect of all off-market
transactions and the initial issuance of securities in a dematerialized form.
Stamp duty is payable either by the purchaser or the seller on a transaction and not
both

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Unified Stamp duty on Security transactions in India

The stamp duty rates applicable to the various types of security transaction are as follows:

Type of Security Rate (%)

Debentures-Issue 0.005%

Debentures-Transfer and reissue 0.0001%

Shares -Issued 0.005%

Equity Delivery Trade 0.015%

Intraday Trades 0.003%

Futures (equity and commodity) 0.002%

Options (equity and commodity) 0.003%

Currency and interest rate derivatives 0.0001%

Other derivatives 0.002%

Government securities Nil

Repo on corporate bonds 0.00001%

Who is responsible for the payment of stamp duty on security

transactions?

The below table helps you to find out who is responsible for the payment of stamp duties:

Type of transaction Payee

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 Type of transaction Payee

Sale of security through the stock exchange Purchaser

Sale of security other than through a stock Seller

exchange

Transfer of security through a depository Transferor

Transfer of security other than through a stock Transferor

exchange or depository

Issue of security Issuer

Any other instrument not specified Person making, drawing, or

executing such instrument

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 investors can not directly go and open an account with these
depositories, they would need to open an 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 the 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 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 charged 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.

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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 tax treatment.

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