Introduction –

This write up seeks to highlight the value of contract notes and examines their relevance in the world of trading. Understanding how to read a contract note is important as it confirms all the information of the trades performed on a specific day.

What is a Contract Note?

A contract note accounts for all successful trades made on a particular day. It serves as legal proof of a given individuals transactions.

Each contract note is made up of the following components:

  • – Order & Trade Number
  • – Order & Trade Time
  • – Name and Symbol of the Securities Traded
  • – Action Carried Out : Buy or Sell
  • – Type of Trade : Delivery or Intraday
  • – Quantity & Price of the Trade
  • – Charges Levied : Brokerage & Other Statutory Charges
  • – Net Amount Receivable / Payable

What Purpose do Contract Notes Serve?

  • – It confirms the trades carried out by an investor on a given day
  • – Total Brokerage charged can be discerned
  • – The Net Amount Receivable / Payable is made apparent.

Contract Notes examined with a fine-tooth comb!

Take a look at what the different columns mean.

 

Order No. & Trade No.:

This column accounts for the unique numbers assigned by Exchanges to specific Orders and Trades respectively.

Order Time:

The exact time at which an investors Order was placed on the Exchange is highlighted here.

Trade Time:

The time at which an investors Trade was successfully executed on the Exchange falls under this column.

Example: Suppose, the current price of Reliance Equity is ₹ 2,000 (Last traded price). You placed a Buy Order (Limit Price) for ₹ 1,995 at 10:01:05 am. Your Order got executed successfully at 10:30:27 am. In this case – Your Order Time is 10:01:05 am | Your Trade Time is 10:30:27 am

Securities/Contract Description:

Refers to the name of the stock/contract which was traded.

Buy/Sell:

Simple – Refers to the type of order placed by an investor.

Quantity:

This accounts for the amount of stock an investor trades in. Positive numbers apply to Buy Orders whereas negative (-) numbers apply to Sell Orders.

Gross Rate per Unit:

This rate highlights the price at which an investors order was executed on the Exchange.

Brokerage per Unit:

Brokerage charged for every trade mentioned in Table 2 – Order Wise Details.

Net Rate per Unit:

As brokerage charges are mentioned separately, Net Rate per Unit amounts to the same value as Gross Rate per Unit.

Closing Rate per Unit:

Applicable to Derivative Trades exclusively, this rate accounts for the price at which a particular contract closed for the day.

Net Total Before Levies:

This refers to the total amount prior to other charges being added.

  • – A positive (+) amount is indicative of an Amount Receivable by You.
  • – A negative (–) amount is indicative of an Amount Payable by You.

While the 1st table provides you with comprehensive details, the next table – Order-wise Details – is structured to provide you with a simple summary of your trades, along with the brokerage.

 

The last table shows the various levies and taxes that are charged. Let’s take a look at what these are –

 

Exchange:

This column provides details pertaining to the Exchange and segment that have been traded.

Example – NSE-Capital: NSE refers to the Exchange, while Capital refers to the Equity Segment

Pay In/Pay Out Obligation:

This is the sum of Net Total before Levies (Table 1) and Brokerage charged (Table 2).

  • – A positive (+) amount is indicative of an Amount Receivable by You.
  • – A negative (–) amount is indicative of an Amount Payable by You.

Securities Transaction Tax (STT):

This refers to the direct tax levied on every trade made on the Exchange which is collected by the broker and paid to the Exchange. STT is levied on both buying and selling on equity delivery, and on selling on intraday and F&O.

Taxable Value of Supply = Total brokerage + Exchange Transaction Charges + SEBI Turnover Fees.

  • Total Brokerage– Total Brokerage charged as per your Brokerage Plan
  • Exchange Transaction Charges–  This fee is levied by Exchanges like the NSE, BSE, MCX and NCDEX in return for enabling trading.
  • SEBI Turnover Fees– The Securities and Exchange Board of India (SEBI) charges fees on securities transactions for regulating the market.

CGST – Central GST

SGST – State GST

If you are from Maharashtra, CGST + SGST will be levied. For the rest of the country, IGST (Inter-state GST)/UGST (Union Territory GST) will be levied.

Stamp Duty:

This is a Government levy applicable on transfer of securities like shares, debentures, futures and options, currency, and other capital assets.

Auction/ Other Charges:

These charges will be levied to you if applicable.

For more details on Charges & Levies – Visit our Transaction Charges Page

Net Amount Receivable by Client / (Payable by Client):

The Net Total amount after all levies and charges.

  • – A positive (+) amount is indicative of an Amount Receivable by You
  • – A negative (–) amount is indicative of an Amount Payable by You

In case you are looking for Charges related to DP (Depository Participant Charges), Auto Square-Off, Call-n-Trade, Delayed Payment, MTF interest or AMC fees – refer to your Ledger Report.

To sum up, contract notes provide investors a summary of their trades made on a particular day. In addition to these trades, they are provided with an overview of their profits and losses. Contract notes are available in an electronic format with a digital signature.

For any further assistance write to us or reach us via the “Contact Us” option in the Angel One Mobile App.