In this article we are going to discuss total charges which need to pay when you perform a trade. There are two parts of this - one brokerage, charged by broker, the second part is other charges and taxes. In the second part you need to pay Transaction Charges, STT or Securities Transaction Tax, GST, Stamp Duty and SEBI Charges.Brokerage
Brokers are free charged by the broker. There is no minimum limit, but there is a maximum limit of 2.5%. No broker can charge brokerage higher than this. Usually, full-service brokers charge in % basis while discount brokers charge a flat fee irrespective of the volume of trade or charges a fixed monthly fee. Depending on the brokerage, GST needs to pay for brokerage.SEBI charges
SEBI or Securities and Exchange Board of India charges for buy and sell transactions of securities in India. It is the fixed charge of Rs 20/crore or 0.0002% of equity delivery, Intraday, derivative and currency F&O. There are no SEBI charges on the commodity.Exchange Transaction charges
It comprises of two charges turnover charges, plus clearing charges. Turnover charges are a fee levied by Stock exchanges like NSE, BSE and MCX for trade executed through them. It varies by segment and stock exchanges. Clearing charges are the charges which broker pays for professional clearing members to clear the trade. Broker charges both of it to the clients to pay it off.
As the name implies, this is the tax imposed on transactions in stock, index options and futures. It is not charged on bond, currency and mutual fund. STT varies for Equity (Cash) and F&O transactions. For delivery based trading, it charged on both buy and sell side. For Intraday and F&O segment, it is only charged on the sell side.
STT on commodity is called CTT or Commodity Transaction Tax. CTT does not apply to certain agro commodities, but it does apply to all non agro commodities like gold, silver and non-ferrous metals such as copper and energy products like crude oil and natural gas
Stamp Duty is the State Government tax levied on instruments and documentation. The levy of stamp duty is a state subject and thus the rates of stamp duty vary from state to state. In Maharastra, it is 0.01% of equity delivery and 0.002% of derivatives. The broker charges the stamp duty by the state which he issues the contract note from.GST
GST is levied on all services provided in India. The new GST rate is 18% in India for trading. For securities, transaction, it is calculated on brokerage charges plus transaction cost.
Last updated on 5th Jun 2019