What are the different types of charges in trading?

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There are various kinds of charges that you encounter while trading in India, namely selling or buying shares. Some are well-known including GST (Goods and Services Tax) charges and brokerage charges while some are not always known by investors and traders alike. You should, of course, be aware of a few aspects in advance including full-service brokers and discount brokers. 

Key trading charges worth noting: 

  • Security Transaction Tax (STT)

-This is the second-highest charge after brokerage while trading in stocks/shares. 

– For delivery trading, STT is chargeable for both sell and buy transactions and is equal to 0.1% of the total transaction price on both sides. 

-For derivative and intraday trading (futures and options), STT is chargeable solely upon selling the stock in question. The STT charge is 0.025% of the STT charge of total transaction prices while you are selling. 



-For equity futures, STT is equivalent to 0.01% for the sell-side. For equity options trading, STT is equivalent to 0.05% on the sell-side (premium). You can use a brokerage calculator online for working out the charges. 

  • Stamp Duty: Stamp Duty is uniformly chargeable irrespective of state of residence with effect from 1st July, 2020.
    • Delivery equity trades- 0.015% or Rs. 1,500 per crore (buy-side).
    • Intraday equity trades- 0.003% or Rs. 300 per crore (buy-side). 
    • Futures (Equity & Commodity)- 0.002% or Rs. 200 per crore (buy-side). 
    • Options (Equity & Commodity)- 0.003% or Rs. 300 per crore (buy-side). 
    • Currency- 0.0001% or Rs. 10 per crore (buy-side). 
    • Mutual Funds- 0.005% or Rs. 500 per crore (buy-side). 
    • Bonds- 0.001% or Rs. 10 per crore (buy-side). 

Stamp duty was chargeable earlier courtesy of the State Government and hence was not similar across the Indian States. Some Indian States had higher charges while some had lower stamp duties charged. Stamp duty was charged on both sides of the transaction, namely selling and buying. 

  • Transaction Charges

– Transaction charges are levied by stock exchanges and on both sides of trading. Charges are the same for delivery and intraday trading. 

– NSE has a fee of 0.00325% of total turnover as transaction charges for equity and delivery trading. BSE charges 0.003% for total turnover as transaction charges in the case of delivery and equity trading. 

– BSE does not have transaction charges for trading in derivatives. The exchange transaction costs stand at 0.0019% for futures trading and also 0.05% of total turnover in the case of Options Trading. 

  • SEBI Turnover Charges
    • SEBI is the full form of the Securities and Exchange Board of India and is the market regulator. 
    • SEBI turnover fees are chargeable on both transactional sides while buying and selling and are the same for all delivery, equity intraday, futures, and options trading. 
    • SEBI turnover charges are equivalent to Rs. 10 per crore of overall turnover. 
  • DP (Depository Participant) Charges
    • There are two Indian depositories, namely NSDL and CDSL; whenever you purchase any share, it is kept in a depository in the electronic format. A fixed amount is charged for this service by the depositories in question. 
    • Depositories do not charge investors/traders directly but charge DPs (depository participants). The brokerage firm/Demat account is the DP in this scenario. 
    • DP is the linkage for the investor and depository with investors not being able to approach the depository directly. 
  • GST– GST is a compulsory tax of 18% on overall transaction and brokerage charges. 
  • Capital Gains Taxes– Capital gains taxes are a vital tax that you should understand carefully. There is STCG (short term capital gains) taxes and LTCG (long term capital gains) taxes. When a stock is sold by you prior to a year of buying the same, it is then taken as a short-term capital gain. In this case, a flat 15% of the profit will be chargeable as the STCG or short-term capital gain. If you are selling a stock after a year of holding, it will then be known as the LTCG or long-term capital gain. In the case of LTCG, you will have to pay taxes of 10% of the overall gains if they surpass Rs. 1 lakh. In case of Intraday Traders, they will have to fork out taxes for capital gains which are dependent upon the tax slab in question. For instance, if you are within the highest income tax bracket and have made profits at the time of intraday trading, you will have to shell out 30% as taxes on the gains in question. 

These are the key charges that you should keep in mind while trading. Some of these charges are not often known or prioritized by investors and traders alike. Do keep them in mind and analyze them carefully before you take the plunge into investing.

Marie Foster
Marie Foster is a reporter based in UK. Marie has also worked as a columnist for the various news sites.

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