List of all Stock Market Trading Fees and Charges in India

In India, engaging in financial market trading involves several charges that can significantly impact the profitability of trades. From brokerage fees to various government taxes, understanding these costs is essential for planning and executing effective trading strategies. This detailed article covers the plethora of expenses traders face, broken down by various types of trading derivatives like equities, options, futures, and commodities.

Trade Charges in the Indian Financial Markets 

From brokerage costs and transaction charges to the various central and state government taxes, let’s look at the plethora of different expenses that you need to account for when trading.

• Brokerage fees

Brokerage fees are a significant expense that can impact your investment returns. They are essentially charges imposed by stockbrokers for executing trades on their platform.

The amount you pay in brokerage fees can differ based on factors like the asset type, the amount of trading you do, and the brokerage plan you choose. Generally, these fees are either a percentage of the trade's total value or a fixed amount per trade.

For instance, if your broker charges a 0.03% fee on the trade value and you trade ₹1,50,000 worth of stocks, your brokerage fee would be ₹45 (0.03% of ₹1,50,000). Conversely, if your broker charges a flat rate of ₹20 per trade, you'll pay ₹20 for each trade, regardless of the trade’s value.

• Securities Transaction Tax (STT) 

Securities Transaction Tax (STT) is a direct tax imposed by the Indian Government. It applies to all buying and selling transactions of financial instruments, except commodities. The STT rate is determined as a percentage of the entire transaction amount and it differs based on the type of trading segment. Here is a table that shows the various STT rates.

Trading Segment	Securities Transaction Tax Rate
Delivery	0.1% on both the purchase and sale of assets
Intraday	0.025% only on the sale of assets
Futures	0.0125% on the sale of futures
Options	0.0625% on the sale of options

 

• Commodity Transaction Tax (CTT)

Applicable only to non-agricultural commodity derivatives, CTT is similar to STT but targets a different segment of the market. For instance, the CTT rate on the sale of commodity derivatives is 0.01% of the sale value, while commodity options attract a CTT of 0.05% of the premium paid by the seller. Here’s a table outlining the different CTT rates.

Trading Segment	Securities Transaction Tax Rate
Commodity Derivatives	0.01% on the sale value of derivative contracts
Commodity Options	0.05% of the premium to be paid by the options seller
Commodity Options (if the option is exercised)	0.0001% of the settlement price to be paid by the buyer of the options contract

• SEBI Turnover Fees

The Securities and Exchange Board of India (SEBI) charges a turnover fee on all buy and sell transactions on stock exchanges. This fee is based on the total value of your trades and is collected by the exchanges for SEBI.

For most financial securities, except debt securities, the turnover fee is 0.0001% of the transaction value. For debt securities, the fee is lower, at 0.000025% of the transaction value.

• Stamp Duty

Stamp duty is collected by state governments on every trade executed and varies from state to state. This duty is generally a small percentage of the transaction value:

Equity (Delivery-based): 0.015% payable by the purchaser.

Equity (Intraday) and Futures: Around 0.003% and 0.002%, respectively.

• Stamp Duty

Stamp duty is a tax applied to certain financial transactions, such as when securities are transferred, and it is set by state governments. The amount of stamp duty differs across states and depends on the value of the transaction.

This tax is gathered by the stock exchange or the clearing corporation from the buyer of the security and is then passed on to the relevant state government. Below is a table showing the stamp duty rates for various trading categories.

Trading Segment	Stamp Duty Rate
Delivery	0.015% payable by the purchaser
Intraday	0.003% payable by the purchaser
Futures	0.002% payable by the purchaser
Options	0.003% payable by the purchaser

• Transaction Charges

Transaction fees are costs that stock exchanges charge to handle trades on their platforms. These fees help cover expenses related to completing trades, clearing them, and settling transactions. Typically, these fees are based on the value of the trades made. Let's explore the transaction fees for buying and selling financial instruments on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Trading Segment	Stamp Duty Rate
Delivery	BSE - Varies according to the stock group  NSE - 0.00325%
Intraday	BSE - Varies according to the stock group  NSE - 0.00325%
Futures	NSE - 0.00190%
Options	BSE - 0.005% NSE - 0.05%

• Goods and Services Tax (GST)

GST is applicable to the sum of brokerage fees, transaction charges, and SEBI turnover fees at a rate of 18%. This can significantly increase the total cost of trading operations.

• Capital Gains Tax

Capital gains tax is charged on the profit made from selling capital assets, such as stocks, bonds, derivatives, and mutual funds. In India, the tax rates vary depending on how long you've held the asset.

For equity assets, including mutual funds, if they are held for more than 12 months, the profits are treated as Long-Term Capital Gains (LTCG) and are taxed at 10%. Importantly, LTCG is only taxed if the gains exceed ₹1 lakh in a financial year.

If these assets are held for less than 12 months, then the profits are considered Short-Term Capital Gains (STCG) and are taxed at a rate of 15%.

For debt mutual funds, any profits are counted as part of your total income and taxed according to your income tax bracket, regardless of the holding period. Similarly, profits from equity or commodity derivatives are seen as speculative income and are also added to your total income, being taxed at your personal income tax rate.

• Miscellaneous Charges

Other charges can include Demat account maintenance fees, electronic transfer fees, and charges for various services like call & trade, physical statements, etc. For example, Angel One charges ₹20 + GST per executed order for their call and trade service.

Considerations for Different Trading Segments

Each trading segment—equities, derivatives, and commodities—has unique charges associated with it. For instance:

• Equities: Include brokerage fees, STT, SEBI turnover fees, stamp duty, and GST on brokerage and transaction charges.
• Futures and Options: Involve brokerage, STT for options, transaction charges, SEBI fees, and CTT for commodity options.
• Commodities: Attract brokerage (after initial promotional periods), CTT, and specific transaction charges for different commodity categories.

Here's a detailed breakdown of charges by Angel One for each type of trading derivative in tabular form:

Equity Charges

Charge Type	Stock Investments	Intraday Trading	Futures	Options
Transaction Charges	NSE: 0.00325%	NSE: 0.00325%	NSE: 0.00190%	NSE: 0.05%<br>BSE: 0.005%
Demat Transaction / DP Charges	₹20 + GST / Company Sell	₹0	₹0	₹0
Securities Transaction Tax (STT)	0.1%	0.025%	0.0125%	0.0625%
GST	18%	18%	18%	18%
Stamp Duty Charges	0.015%	0.003%	0.002%	0.003%
SEBI Charges	₹10 / crore	₹10 / crore	₹10 / crore	₹10 / crore
Clearing Charges	₹0	₹0	₹0	₹0

Currency Derivative Charges

Charge Type	Currency Futures	Currency Options
Brokerage	₹0 up to ₹500 then ₹20/order	₹0 up to ₹500 then ₹20/order
Transaction Charges	NSE: 0.0009%<br>BSE: 0.00022%	NSE: 0.035%<br>BSE: 0.001%
Securities Transaction Tax (STT)	₹0	₹0
GST	18%	18%
SEBI Charges	₹10 / crore	₹10 / crore
Stamp Duty Charges	0.0001%	0.003%

Commodity Derivative Charges

Charge Type	Commodities Futures	Commodities Options
Brokerage	₹0 up to ₹500 then ₹20/order	₹0 up to ₹500 then ₹20/order
Transaction Charges	Varies by commodity	0.05% on Premium Value
Commodities Transaction Tax (CTT)	0.01% Only on Non-Agri	0.05%
Risk Management Fee	0.01% on Agri (overnight)	NA
GST	18%	18%
SEBI Charges	₹10 / crore	₹10 / crore
Stamp Duty Charges	0.002% on Total Turnover Value	0.003% on Premium Value

Planning Your Trades

Understanding these fees is crucial for managing your investment costs effectively. Here are a few tips:

• Choose the Right Broker: Compare brokerage rates, service quality, and additional fees.
• Consider Trading Volume: High-volume traders might benefit from a fixed-fee broker to keep costs predictable.
• Keep an Eye on Taxes: Make sure you account for GST and capital gains tax in your profitability calculations.

Conclusion

Navigating through the myriad of charges in the Indian financial markets requires a clear understanding and careful planning. By factoring in these costs, traders can more accurately calculate potential profits and make more informed trading decisions. Awareness of these fees also aids in selecting the right broker and trading platform, as cost efficiency can vary significantly based on the fee structures offered.

Successful trading not only depends on market strategies and financial acumen but also on understanding and managing the associated costs effectively. Whether you are a novice trader or an experienced market player, getting to grips with these expenses will enhance your trading efficiency and potential profitability.