Various Charges You Pay For Trading Stocks In India

No matter what type of a trader you are, it is important that you know what all charges you are subjected to while executing a trade.

Most of the traders usually consider only brokerage as the cost they have to pay while they trade. When read thoroughly, one can find detailed list of many other additional charges other than brokerage in the contract note, that are levied on a trader during and after stock exchange transactions.

Other than brokerage, there are securities transaction tax (STT), stamp duty, service tax and other charges. Other charges consists of transaction charges and SEBI turnover charges. Except for STT, service tax is levied on all the charges.

Securities Transaction Tax (STT): STT is a direct tax levied and collected by the central government of India on gains from securities. It was introduced as a solution to avoidance of capital gains tax. As per the new tax announced by the government, brokers are required to automatically add this tax to the transaction price, hence no avoid ance in paying the tax. STT is applicable only on share transactions made through a recognized stock exchange in India. Off-market share transactions are not covered under STT.

Service Tax: Service tax is levied at 10.30%. Service tax, surcharge and education cess are applicable only on brokerage and not securities transaction tax (STT).

Stamp Duty: Stamp duty is nothing but a certain amount of money levied on value of shares transferred. In India stamp duty is levied by various states, and therefore rate of stamp duty varies from state to state.

Know about all the charges and taxes during a trade execution in detail:

Product Transaction Rate Service Tax Effective Rate Charged On
Securities Transaction Tax (STT)
Equity Delivery
Purchase 0.10% NA 0.10% Turnover
Sell 0.10% 0.10% Turnover
Equity Intra-Day
Purchase NA NA NA
Sell 0.03% NA 0.03% Turnover
Future
Purchase NA NA NA
Sell 0.02% NA 0.01% Turnover
Option
Purchase 0.13% NA 0.13% Settlement Price, on exercise
Sell 0.02% NA 0.02% Premium
Transaction Charges
Equity Delivery
Purchase 0.00% 0.1236 0.00% Turnover
Sell 0.00% 0.1236 0.00% Turnover
Equity Intra-Day
Purchase 0.00% 0.1236 0.00% Turnover
Sell 0.00% 0.1236 0.00% Turnover
Future
Purchase 0.00% 0.1236 0.00% Turnover
Sell 0.00% 0.1236 0.00% Turnover
Option
Purchase 0.05% 0.1236 0.06% Premium
Sell 0.05% 0.1236 0.06% Premium
SEBI Turnover Charges
Equity Delivery
Purchase 0.00% 12.36% 0.00% Turnover
Sell 0.00% 12.36% 0.00% Turnover
Equity Intra-Day
Purchase 0.00% 12.36% 0.00% Turnover
Sell 0.00% 12.36% 0.00% Turnover
Future
Purchase 0.00% 12.36% 0.00% Turnover
Sell 0.00% 12.36% 0.00% Turnover
Options
Purchase 0.00% 12.36% 0.00% Premium and Notional Value For Exercise/Assignment
Sell 0.00% 12.36% 0.00% Premium and Notional Value For Exercise/Assignment
Stamp Duty
Equity Delivery
Purchase 0.01% 12.36% 0.01% Turnover, in 5000 multiple
Sell 0.01% 12.36% 0.01% Turnover, in 5000 multiple
Equity Intra-Day
Purchase 0.00% 12.36% 0.00% Turnover, in 5000 multiple
Sell 0.00% 12.36% 0.00% Turnover, in 5000 multiple
Future
Purchase 0.00% 12.36% 0.00% Turnover, in 5000 multiple
Sell 0.00% 12.36% 0.00% Turnover, in 5000 multiple
Options
Purchase 0.00% 12.36% 0.00% Turnover, in 5000 multiple
Sell 0.00% 12.36% 0.00% Turnover, in 5000 multiple

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