Investing in stocks effectively requires a low brokerage share trading service that fits an investor’s financial needs, and goals. A brokerage is a sum payable by the investor to the stockbroker upon transaction of a particular trade. In India, online stock trading usually comprises transactions through segments of equity futures and options, commodities, currency, intraday and carry forward transactions across different stock and commodity exchanges, with the BSE and the NSE being the most prominent of them. Each of the transactions executed through these trading segments incurs a brokerage as levied by the brokerage firm or stockbrokers. The brokerage levied through online share trading in India depends on the category of stockbrokers handling the transactions.
Categories of Stockbrokers in India
Full-service or Traditional Stockbrokers
In addition to the sale and purchase of shares, these stockbrokers offer a variety of share trading services to their customers for brokerage. Customers are entitled to receive personal trading advice from these brokers that ensure the implementation of sound trading decisions for guaranteed returns. Their brokerage charges are usually deemed to be expensive and their association is highly beneficial to customers eyeing long-term investments.
These stockbrokers usually charge a discounted brokerage rate or a flat rate brokerage on every executed trade. Besides low brokerage share trading services, discount brokers offer advanced trading technology to their customers. The brokerage is usually fixed irrespective of the number of stocks traded by the investors. Customers with short-term investment plans can ideally hire discount stockbrokers given their lowest brokerage.
Types of Brokerage Charges
Brokerage charges usually involve three components – brokerage, taxes, and miscellaneous fees. Smart investors, whether experienced or amateurs, keep an eye out for low brokerage share trading without compromising on the service quality their stockbrokers have to offer. Previously, share trading in India was being handled by full-service stockbrokers who levied a costly brokerage on their investors. With the advent of online share trading in India triggered by a rapid technological advancement, things began to change for good in the brokerage scenario as well. The number of online stockbrokers steadily increased bringing down the brokerage charges that benefitted the investors and traders alike. Here are some of the key brokerage charges levied through online stock trading in India:
The brokerage levied by the online stockbrokers can be classified into three categories:
Percentage-based or Ad-valorem fee:The brokerage is charged as a percentage of the value of trade executed by the customer on a given day. The ad-valorem brokerage typically ranges between .05% to 0.5% and varies as per the segment that the customer trades in. Full-service brokers usually charge percentage-based brokerage.
Flat Rate per Trade: A fixed-rateper trade or order is charged as a brokerage and it is largely levied by discount brokers. The brokerage helps customers save a large part of their costs per trade.
2. Security Transaction Tax(STT)
STT is a standard, direct, regulatory tax payable by the investors and traders to the Central government for both selling and buying on equity delivery, and selling on Equity Futures and Options, and intraday. A standardised STT applies to all the brokers -both discounted and full-service. However, this cost is passed onto the investors or traders by the brokers.
3. Stamp Duty Charges
It is a standard, regulatory charge payable by the investors and traders to the state governments. In a departure from variable stamp charges levied until July 1, 2020, they are now levied as a uniform rate on instruments transacted in the stock exchange.
4. Transaction/Turnover and Clearing Charges
These are levied by exchanges such as NSE, BSE, NCDEX,MCX, and clearing charges are levied by clearing members or brokers for settling transactions executed by the clients using their facilities.
5. SEBI Fees
It is a standard, regulatory charge payable to SEBI by the investors and traders on security transactions. The charges are standard across all brokers and are passed on as a cost to the investors and traders.
6. GST (Goods and Services Tax) on all the above brokerage charges
An 18 percent GST is levied upon the total of brokerage, transaction and clearing charges, and SEBI A high brokerage could have an adverse bearing on the quantum of GST payable. Thus, it is important to look out for low brokerage share trading options to cut down on the overall cost of transactions.
To avail the benefit of low brokerage share trading, it is important to thoroughly research and choose a reputed, reliable online stock broker such as Angel One that offers its customers the lowest and simplified brokerage by market regulatory standards along with handsome returns on investment. Here are the brokerage charges offered by Angel One for online share trading in India across segments:
|Charge Type||Equity Delivery||Equity Options||Equity Futures||Intraday|
|Brokerage||NIL||Minimum of Rs. 20 per trade or 0.25 percent of transaction value||Minimum of Rs. 20 per trade or 0.25 percent of transaction value||Minimum of Rs. 20 per trade or 0.25 percent of transaction value|
|STT||0.1 percent on sale and purchase||.05 percent on sale (on premium)||.01 percent on the sale||.025 percent on the sale|
|Stamp Duty Charges||0.015 percent of the turnover value for the buyer||.003 percent of the turnover value for the buyer||.002 percent of the turnover value for the buyer||.003 percent of the turnover value for the buyer|
|SEBI charges||Rs.10 per Crore||Rs.10 per Crore||Rs.10 per Crore||Rs.10 per Crore|
|Transaction/Turnover charges||.00275 percent -.00335 percent on turnover value for NSE||.053 percent on premium value||.00195 percent on turnover value for NSE||.00275 percent -.00335 percent on turnover value for NSE|
|GST||18 percent on Brokerage, transaction, and SEBI charges||18 percent on Brokerage, transaction, and SEBI charges||18 percent on Brokerage, transaction, and SEBI charges||18 percent on Brokerage, transaction, and SEBI charges|
A low brokerage share trading account helps in compensating for any transaction losses by a nominal margin without overburdening the customer. With zero account maintenance (AMC) charges for the first year, a low brokerage at a flat rate of Rs. 20 per trade, and free equity delivery trades for a lifetime with no hidden charges, Angel broking ensures a hassle-free and fair online stock trading experience to its customers. What’s more, is that you can now use their brokerage calculator to get a clear picture of how much brokerage you would be paying for a given transaction and make some efficient investing decisions. The brokerage calculator is accurate and provides a comparison of costing across competitors that could help you go with the lowest brokerage.