All Types of Trading Charges in India You Should Know

All Types of Trading Charges in India You Should Know

Are you someone who is all set to take a baby step in trading? Then, one thing which you should make yourself aware are the various trading charges. For any stock exchange to run its course, it levies trading charges from the investors. For instance, though opening an online demat and trading account does not cost anything, the investor needs to pay safety charges, annual maintenance charges and transaction charges to maintain this online demat and trading account. So, among the various charges, while some of them are popular among the investors like brokerage fee and GST, there are few which the investors will not be aware of. Here let us discuss in brief about types of fee an investor will have to pay and some option trading tips

Brokerage Fee

Regarding brokerage fee, a full-service broker charges 0.03% to 0.60% of the transaction volume while a discount broker levies Rs. 10 or Rs. 20 per trade on intraday (When a share is bought and sold on the same day). Most of the discount brokers do not charge any fee on delivery trading (when a share is bought and kept in hold it for selling it later). While discount brokers like Zerodha charges Rs. 20 or 0.03% (whichever is lower) for intra-day trading, they don’t charge for delivery trading. 

Security Transaction Tax (STT)

Apart from brokerage, this is the second biggest charge involved while trading in stocks.

  • For delivery trading, STT which is equal to 0.1% of the total transaction price is charged for buyer and seller on each side of trading. 
  • For intraday, STT is charged only while the stock is sold. STT charged is 0.025% of the total transaction price.

Transaction Fee

This is the charge levied by the stock exchange on buyer and seller. For delivery trading, national stock exchange charges 0.00325% of the total turnover. Bombay stock exchange (BSE) charges a fee of 0.003% of total turnover. Same charge applies for intraday trading. 

Stamp Duty

Stamp duty is identical for all states and is applied only on buying side. 

Trade 

Stamp Duty  

Delivery equity trades 0.015% or Rs 1500 per crore on buying side
Intraday equity trades 0.003% or Rs 300 per crore on buy-side
Mutual funds 0.005% or Rs 500 per crore on buying side
Bonds 0.0001% or Rs 10 per crore on buying side

 

SEBI Turnover Charges   

Securities and Exchange Board of India, the market regulator, in India levies a specific charge to both seller and buyer. This fee is same for both intraday and delivery trading. SEBI charges Rs. 10 per crore w.e.f. 1st June 2021. 

Capital Gain Tax

Selling a stock before one year of buying attracts 15% of the profit as short-term gain tax. If you sell them after one year of holding, you will be levied 10% of gains as long-term gain tax.

Goods & Service Taxes (GST)

GST is compulsory tax charged by the government on the services rendered. From 1st July 2017, investing in equity attracts 18% tax as GST. An STT of 0.1% the transaction value is also charged.  

Capital Gain Tax

Selling a stock before one year of buying attracts 15% of the profit as short-term gain tax. If you sell them after one year of holding, you will be levied 10% of gains as long-term gain tax.

There are several trading charges that come along with trading. It is good to be familiar with these charges before you set out to be a trader. 

doreen

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