Trading Charges in India: STT, Brokerage, Exchange Fees, GST
Trading charges in India are the various fees levied on buying and selling securities through recognised exchanges. Every transaction on NSE or BSE attracts Securities Transaction Tax (STT), brokerage, exchange transaction charges, SEBI turnover fee, GST on specified components, and stamp duty, which together can erode 0.3–1% or more of the trade value depending on the product and holding period. Understanding these charges is essential to calculate the true break-even price and net profit of any position.
Key takeaways
- STT applies on the sell side for intraday equity and futures; both buy and sell for delivery; and on option premiums when selling.
- Stamp duty is uniform nationwide since July 2020, charged only on the buy side at rates varying by product type.
- GST at 18% is levied on brokerage, exchange transaction charges and SEBI fee, compounding the overall cost.
- Exchange transaction charges and SEBI turnover fee are small but must be read from the contract note as they change periodically.
- Accurate cost calculation requires adding all statutory and broker charges to determine the effective entry and exit price.
What are the components of trading charges in India?
Every buy or sell order executed on NSE or BSE triggers a cascade of statutory and operational charges. The primary components are Securities Transaction Tax (STT), brokerage, exchange transaction charges, SEBI turnover fee, GST on certain elements, and stamp duty. Together these deductions appear on the contract note and directly impact the net profit or loss from a trade. Retail traders often focus on brokerage alone, yet statutory levies can constitute a larger share of the total cost, especially in intraday and derivative segments.
How is Securities Transaction Tax (STT) calculated?
STT is a tax collected by the central government on every securities transaction and is non-negotiable. The applicable rate and the side of the transaction (buy or sell) depend on the product:
| Product | STT rate | Charged on | Side |
|---|---|---|---|
| Equity delivery | 0.1% | Trade value | Buy & Sell |
| Equity intraday | 0.025% | Trade value | Sell only |
| Equity futures | 0.05% | Trade value | Sell only |
| Options (sell) | 0.15% | Premium | Sell only |
| Options (exercise) | 0.15% | Intrinsic value | Buy (exercised) |
For a delivery purchase and sale, STT is deducted twice—once when shares are bought and again when sold. In contrast, intraday equity and futures STT apply only on the sell leg, reducing the cost slightly. Option sellers pay STT on the premium received, while option buyers face no STT unless they exercise the contract, in which case 0.15% of the intrinsic value is charged.
What is stamp duty and how does it differ across products?
Stamp duty is a state levy that was standardised nationwide under amendments to the Indian Stamp Act in July 2020. It is collected by the stock exchange on behalf of the state government and appears on the buy side only:
- Delivery equity: 0.015% of trade value
- Intraday equity: 0.003% of trade value
- Futures: 0.002% of trade value
- Options: 0.003% of premium
Because stamp duty applies to the buy leg, a round-trip trade incurs it once. The nationwide uniformity simplifies compliance but the rate structure means that even non-delivery trades carry a small fixed cost.
How do brokerage models affect total charges?
Brokers charge a fee for order execution, quoted as either a percentage of trade value or a flat fee per executed order. Full-service brokers may levy 0.3–0.5% or higher on equity delivery, while discount brokers often cap intraday and F&O brokerage at Rs 10–20 per order regardless of size. Delivery trades at discount brokers can still attract percentage-based brokerage, albeit lower than traditional rates. The brokerage appears as a separate line item on the contract note and forms the base for calculating GST.
What are exchange transaction charges and SEBI turnover fee?
Exchange transaction charges are levied by NSE or BSE to cover infrastructure and regulatory costs. These charges are small—typically a few basis points—but are revised periodically by the exchanges and vary by segment (equity cash, equity F&O, currency, commodity). The exact percentages are disclosed on exchange circulars and printed on every contract note.
SEBI turnover fee is a flat Rs 10 per crore of turnover, calculated on the aggregate value of all trades. For an individual transaction the fee is negligible, but it scales with trading volume. Both exchange charges and SEBI fee are included in the base for GST computation.
How is GST applied to trading charges?
GST at 18% is levied on the sum of brokerage, exchange transaction charges and SEBI turnover fee. It does not apply to STT or stamp duty, as those are statutory taxes. The formula is:
GST payable = 18% × (Brokerage + Exchange charges + SEBI fee)
Because GST inflates the non-STT charges by nearly one-fifth, traders using high brokerage plans see a proportionally larger GST deduction. Discount brokerage models with flat per-order fees result in lower absolute GST, making them attractive for active intraday and F&O participants.
Worked example
Consider a trader who bought 100 shares of SBIN on 14 October 2026 at the NSE daily close of Rs 954.90 and sold them on 29 October 2026 at the close of Rs 971.90. The trade is delivery (equity cash segment).
Buy leg (14 Oct 2026) Trade value = 100 × 954.90 = Rs 95,490 Brokerage (assume 0.1%) = Rs 95.49 STT (0.1% buy) = Rs 95.49 Stamp duty (0.015% buy) = Rs 14.32 Exchange charges + SEBI fee ≈ Rs 2.00 GST (18% on Rs 95.49 + Rs 2.00) = Rs 17.55 Total buy cost ≈ Rs 95,490 + 95.49 + 95.49 + 14.32 + 2.00 + 17.55 = Rs 95,714.85
Sell leg (29 Oct 2026) Trade value = 100 × 971.90 = Rs 97,190 Brokerage (0.1%) = Rs 97.19 STT (0.1% sell) = Rs 97.19 Stamp duty = Rs 0 (sell side exempt) Exchange charges + SEBI fee ≈ Rs 2.00 GST (18% on Rs 97.19 + Rs 2.00) = Rs 17.85 Total sell realisation ≈ Rs 97,190 – 97.19 – 97.19 – 2.00 – 17.85 = Rs 96,975.77
Net profit = Rs 96,975.77 – Rs 95,714.85 = Rs 1,260.92
Without charges the gross gain would have been Rs 1,700. Trading charges consumed approximately 25.8% of the gross profit, illustrating the importance of factoring in all levies when planning entries and exits.
Common mistakes
Many traders calculate break-even by adding only brokerage to the buy price, ignoring STT, stamp duty and GST. This leads to premature exits or holding losing positions longer than optimal. Another error is assuming stamp duty applies on both legs; it is buy-side only. In F&O, confusing option STT (on premium) with futures STT (on notional value) results in incorrect cost estimates. Finally, overlooking the compounding effect of GST on brokerage and exchange charges can make high-frequency strategies unviable if the per-trade cost is not capped. Reading the contract note line by line after every trade ensures accurate record-keeping and helps identify any discrepancies in charges applied by the broker.
In short
- Equity delivery STT is 0.1% on both buy and sell legs from 1 April 2026, while equity intraday STT is 0.025% on the sell side only.
- Stamp duty is levied at 0.015% for delivery trades, 0.003% for intraday equity and options, and 0.002% for futures, applied on the buy side.
- SEBI turnover fee is Rs 10 per crore of turnover, pooled across all trades in an account.
- GST at 18% applies to the aggregate of brokerage, exchange transaction charges and SEBI fee, increasing the effective burden.
- Futures STT rose to 0.05% on the sell side from 1 April 2026, while option-sell STT increased to 0.15% of premium.
Frequently asked questions
Is STT refundable if a trade results in a loss?
No, STT is a transaction tax collected by the government at the point of sale and is non-refundable regardless of profit or loss. It is a cost of trading and must be factored into break-even calculations. The only relief is that STT paid on equity transactions qualifies those gains or losses for the concessional capital gains tax regime.
Does stamp duty apply to both buy and sell sides of a trade?
Stamp duty is levied only on the buy side of a transaction. When shares or derivatives are sold, no additional stamp duty is collected. This uniform treatment across India was established by amendments to the Indian Stamp Act in July 2020, simplifying compliance and reducing confusion about state-specific rates.
Why is GST charged on brokerage but not on STT?
GST is a tax on services, and brokerage along with exchange transaction charges constitute services provided by the broker and exchange. STT and stamp duty are statutory taxes on the transaction itself, not services, so they fall outside the GST framework. This dual structure means GST inflates the service component by 18 percent, compounding the overall trading cost.
How do discount brokers reduce total trading charges?
Discount brokers cap brokerage at a flat fee per order—often Rs 10 to Rs 20—instead of a percentage of trade value. This significantly lowers the base on which GST is calculated, especially for large-ticket trades. However, STT, stamp duty, exchange charges and SEBI fee remain identical across all brokers, so the savings are confined to the brokerage and GST components.
Are exchange transaction charges the same for equity and F&O?
Exchange transaction charges differ by segment and are periodically revised by NSE and BSE. Equity cash, equity derivatives, currency and commodity segments each have distinct charge structures, typically expressed in basis points or rupees per crore. Traders should refer to the latest exchange circulars or their contract notes for precise rates applicable to each product.
Can trading charges be claimed as a deduction for tax purposes?
Yes, all trading charges—brokerage, STT, stamp duty, exchange fees, GST and SEBI fee—are deductible expenses when computing taxable income from trading. For equity delivery, they reduce the net sale consideration (short-term or long-term capital gains). For intraday equity and F&O, they form part of business expenses under speculative or non-speculative income. Accurate documentation on contract notes is essential for audit and filing.
Sources
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