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Brokerage Charges Explained (Brokerage, Taxes, Fees)

Published on Thursday, November 20, 2014 by Chittorgarh.com Team | Modified on Saturday, August 28, 2021

Brokers are middlemen or agents who help us in buying and selling shares, derivatives (Futures and Options) and other financial instruments. Brokers charge a fee called brokerage for the service they offer.

But brokerage is not the only fee customers have to pay. The total amount paid to the stock/commodity brokers is made of multiple charges, fees and taxes. This includes:


1. Brokerage

The fee brokers charges for the service they offer. Each broker has its brokerage model. There are 3 types of brokerage plans available in India:

  1. Brokerage in Percentage of Trading Volume
  2. Flat per trade brokerage
  3. Monthly Unlimited Trading Plan

Note: While traditional brokers charge the brokerage in % of trade amount; the discount brokers offer a flat monthly or per-trade fee.


2. Transaction Charges (Exchange Turnover Fee)

The transaction charge is a fee charged by an exchange (BSE, NSE, MCX) for using its platform. This is the largest part of the cost of trading with discount stock brokers. The transaction fee is an addition of two charges.

Transaction charge = Exchange Turnover Charges + Clearing Charges

Visit Transaction charges are explained for more detail about transaction charges


3. Securities Transaction Tax STT

The STT is payable on the value of securities transacted through a recognized stock exchange. This is charged only on the sell side for intraday and F&O trades. It is charged on both sides for delivery trades in equity. There are no STT on Bonds, Currency and Mutual funds.

SegmentSTT on Share Trading
Equity Delivery0.1% on both Buy and Sell
Equity Intraday0.025% on the Sell Side
Equity Future0.01% on Sell Side
Equity Options0.017% on Sell Side(on Premium)
Currency FuturesNo STT
Currency OptionsNo STT
Commodity0.01% on Sell Side (Non-Agri)

4. Commodity Transaction Tax (CTT)

Commodity Transaction Tax (CTT) is a tax levied on exchange-traded commodity derivatives in India. Agricultural commodities are exempted from CTT but there are taxes on non-farm commodities or non-agro like gold, silver and non-ferrous metals such as copper and energy products like crude oil and natural gas.


5. Stamp Duty

Stamp Duty on securities transactions is the tax levied on documentation by the state governments in India. check Stamp Duty Rates.


6. GST Tax

GST is a tax imposed by the Government of India on services provided in India. GST on securities transactions is charged at 18% of the total cost of brokerage plus transaction charges.

GST on Share Trading in India

SegmentGST Rates
Equity Delivery, Intraday, F&O18% on Brokerage + Transaction Charge
Currency F&O18% on Brokerage + Transaction Charge
Commodity18% on Brokerage + Transaction Charge

SEBI Turnover Fee or SEBI Charges

SEBI, Securities and Exchange Board of India he regulator for the securities market in India charges a fee for all sale and purchase transactions in securities other than debt securities. This is charged at Rs 5 per crore.

SEBI Turnover Fees

SegmentSEBI Turnover Fee Rate
Equity Delivery, Intraday, F&O0.00005% (Rs 5/Crore)
Currency F&O0.00005% (Rs 5/Crore))
Commodity0.00005% (Rs 5/Crore)

The above fees or charges are provided in detail in the form of Contract Note by the broker.


What is Contract Note in the stock market?

Contract note, a document sent by the broker to the client at the end of the trading day to provide detail about the transaction with the broker.

This document includes detail of buy & sell transactions for the day, brokerage charged, other fees or charges applied and total amount due to customer.

The broker provides an electronic copy of the contract note (in pdf format) for free and charges an additional amount to send a paper copy by mail. One contract note is sent to the customer every day; which include all the transactions for the day with the broker.

Here is a 'Contract Note Sample' which shows all these charges:

Contract Note Sample - India Share Market
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6 Comments

6. Bakshi manindra kumar sinha  Jun 19, 2021 1:20:14 AM I Like It. | Report Abuse Reply
My broker India infoline IIFL Securities gave in writing _ equity delivery 0.25 Percent but actually charges 0.52 to 2.5 percent. He have not disclosed for what amount of Rs. What commission should be charged, now I think better to switch to other broker
5. Mane Meena  Aug 6, 2020 1:02:52 AM I Like It. | Report Abuse Reply
sir
Iam working as teacher.
My broker not explain the brokerage charges except govt duty.
When i open my new account, there advisor/office staff told me that for day trading 0.5 paisa and delivery 0.15 and iam belive the same. After four month when i just checked my account iam shocked.
the broker charges 0.10 paisa and delivery 0.20 paisa. I asked the same for the broker but he told that this is happened from hdqrs we have not done anything. Sir please help me my hard money.
Nearly 15 to 30 thousand loss. How can get me my money. Please help me sir



5.1. Saby Pinto  Apr 24, 2021 12:43:20 AM I Like It. | Report Abuse
Hi,
I too am currently suffering such high brokerage charged by the broker. Although, on their website they say, 0.01% or Rs.9, whichever is lower, they (my broker) charge you 0.01% "on the Share Price, then multiply with the total no of shares. so the brokerage shoots up. So my advice is, 1) study all your contract notes sent by them to you, 2) make a note of where discrepancy according to you, 3) have a word with them about it & clear it with them. If they are not ready to see sense, then......"The Exchanges provide Complaint Resolution, Arbitration and Appellate arbitration facilities at the Regional Arbitration
Centres (RAC). The client may approach its nearest centre, details of which are available on respective Exchange’s website. Please visit www.nseindia.com for NSE,www.bseindia.com for BSE." .....you can contact the RAC & lodge a complaint with them.
4. Krishna  May 2, 2018 5:47:52 PM I Like It. | Report Abuse Reply
Explain CDSL Charges if possible in Angel broking
3. ASIM CHAKRABARTI  Jul 13, 2017 7:57:17 AM I Like It. | Report Abuse Reply
Such articles are definitely required for academic purposes, but people of ordinary prudence won''t know how much to be paid for intra day & Delivery transactions of Rs 100.00
3.1. Yatindra Ranade  Jul 26, 2017 3:48:05 PM I Like It. | Report Abuse
typically if yoh buy and sell Shares worth Rs.100/- , then approximately Rs.1-2 (~1-2% ) will be charged in total including ALL taxes and charges fro the entire transaction
3.2. niraj  Apr 17, 2018 11:21:05 PM I Like It. | Report Abuse
if your brokerage is 0.3% in delivery it is near about 48-49 paisa per 100 INR
2. Amul  Nov 12, 2017 11:49:49 PM I Like It. | Report Abuse Reply
Will there be any charge if keep holding the shares of any xyz company for 1 year?
1. cbsharma  Oct 5, 2017 8:32:20 PM I Like It. | Report Abuse Reply
I am always in doubt about total charges. Brokers not explain rightly.n