Trading Charges in India Explained: Brokerage, STT, GST and More

Why charges deserve attention

Many new traders look only at brokerage, and some brokers advertise zero brokerage on delivery. But a contract note lists several other charges, set by the government, the exchange and the regulator. Individually they are tiny percentages. Over hundreds of trades, especially small and frequent ones, they can decide whether a method makes or loses money.

Understanding them also explains why a trade that "closed at the same price" still shows a small loss, and why a strategy that looks profitable in a simple backtest can turn negative once realistic costs are added.

The charges, one by one

Brokerage: the broker's fee. Discount brokers often charge a flat fee per executed order or a small percentage, whichever is lower, and may charge nothing for delivery. Full-service brokers usually charge a percentage.

Securities Transaction Tax (STT): a tax on the value of the trade, collected by the exchange for the government. For equity delivery it is charged on both buying and selling; for intraday equity, only on the sell side at a lower rate; for options, mainly on the sell side, calculated on the premium; for futures, on the sell side.

Exchange transaction charges: a small fee charged by NSE or BSE on the turnover of every trade.

SEBI turnover fee: a very small regulatory fee on turnover.

Stamp duty: charged by the government on the buy side only.

GST: 18% charged on brokerage plus exchange charges plus the SEBI fee (not on the value of the trade itself).

DP charges: a flat fee charged by the depository participant each time you sell shares from your demat account in a delivery trade, per stock per day.

Rates are revised from time to time, so treat any specific percentage as an illustration and check the current schedule with your broker.

A worked example: intraday equity

Suppose you buy and sell 500 shares at about ₹400 in the same day. Turnover is roughly ₹2,00,000 each side, ₹4,00,000 total. With illustrative rates, brokerage might be ₹20 per side, STT on the sell side about ₹50, exchange charges around ₹12, stamp duty on the buy side around ₹6, the SEBI fee under ₹1, and GST on brokerage and fees about ₹9. Total: roughly ₹115-120.

That means the stock has to move about 23-24 paise in your favour just to break even. On a ₹2 target that is about 12% of the profit; on a 50-paise scalping target it is nearly half.

A worked example: delivery equity

Buy 100 shares at ₹1,500 and sell later at ₹1,650. Turnover is ₹1,50,000 on the buy side and ₹1,65,000 on the sell side. Even with zero brokerage, STT on both sides comes to a few hundred rupees, plus stamp duty on the buy, exchange and SEBI charges, GST on those, and a DP charge on the sale. Total costs might be around ₹350-400 on a ₹15,000 gross gain.

For a longer-term holding, costs are a small share of a typical gain. That is one reason frequent trading and long-term holding have very different cost profiles.

Options and futures

For options, STT and most exchange charges are based on the premium, not on the full contract value, so the percentages look small. But options traders often trade many times, and flat brokerage per order can be a large share of a small premium. Buying one lot of a ₹20 option and selling at ₹22 gives a gross gain that the costs can noticeably reduce.

Futures have STT on the sell side and exchange charges on the full contract value, which is large. Because futures positions are big, even small percentage charges add up to meaningful rupee amounts.

How to read a contract note

After every trading day your broker sends a contract note, a legal record of each trade. It lists the time, quantity and price of every execution, followed by the charges: brokerage, STT, exchange transaction charges, SEBI fee, stamp duty and GST, and the net amount payable or receivable.

Checking a few contract notes against your own records is a good habit. It confirms that the price you saw is the price you got, shows exactly how much each trade cost, and helps you spot unusual charges early. Keep them; they are also useful at tax time.

If the numbers look confusing, add up the turnover (price x quantity on both sides) and compare each charge with it. Seeing STT or exchange charges as a share of turnover makes it easier to understand why some trade types cost more than others.

How to keep costs in check

Trade less often with clearer setups. Overtrading is the most common way costs eat into results.

Avoid targets that are tiny compared with the round-trip cost.

Prefer fewer, larger moves over many small ones if your method allows it.

Track total charges per month, not per trade. A monthly figure makes the impact visible.

Always include costs in backtests; a strategy that only works before costs does not really work.

Taxes are separate

Charges are deducted at the time of the trade. Income tax on profits is separate and depends on whether the activity is treated as speculative (intraday), non-speculative business (often F&O) or capital gains (delivery). Rules and rates change and depend on your situation, so consult a qualified tax professional.

See the real numbers on iTradeChart

The free brokerage calculator breaks every order into brokerage, STT, exchange charges, SEBI fee, stamp duty, GST and DP charges for equity delivery, intraday, futures and options.

In paper trading, every order shows estimated charges before you place it, and they are deducted from your virtual cash when it fills, so your profit and loss match what a broker would show. Backtests include realistic charges by default, and the Portfolio page shows your total charges.