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Minimum Brokerage Charge (Per Contract Note) Explained

Published on Sunday, December 11, 2016 by Chittorgarh.com Team | Modified on Tuesday, January 7, 2020

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Most brokers in India charges the minimum brokerage fee. You could read this article for more detail about minimum brokerage:

To understand how the minimum brokerage is calculated, let's take an actual contract note issued by Angel Broking, a popular traditional stock broker with highest number of branches in India.

At Angel Broking, the brokerage is charged on % basis of transaction value as agreed with customer at the time of account opening. However, where the rate of share or futures contract is below specified rate where specified rate is calculated as A / B (as explained in example below), then Minimum Brokerage in paise is charged on Quantity instead of % rate.

Example: Lets says that the brokerage agreed with customer is 0.25% with 5 paise as minimum brokerage then specified rate would be (5 / 0.25) which is ₹20. Hence 5 paise would be levied as brokerage on per share basis where share price is less than ₹20.

Also note that the brokerage charged to the customer is higher of brokerage value as per the existing rates or ₹30 per settlement/segment, subject to the maximum rates (2.5%) prescribed by SEBI.

Understanding Angel Broking Contract Note

Angel Broking Real Contact Note Explained

 

  1. In 1st transaction customer bought 1 share of ICICI BANK LTD for ₹263.95. As it's an Equity Intraday transaction, customer is charged the brokerage at 0.05% which is ₹0.132.
  2. In 2nd transaction customer sold 1 share of ICICI Bank Ltd for ₹265.00. The customer is charged 0.05% (Eq Intraday) brokerage which is ₹0.1325.
  3. In 3rd transaction customer bought 1 share of ALOK INDUSTRIES LTD (a penny stock) for ₹2.75. As the share price is less then ₹20; Angel charged flat 5 paisa per share minimum brokerage.
  4. In 4th transaction customer sold 1 share of ALOK INDUSTRIES LTD for ₹2.72. Once again customer paid minimum brokerage of 5 paisa per share

Per Contract Note Minimum Brokerage Rule at Angel

Most traditional brokers also have 'Per Contract Note Minimum Brokerage' charges. Note that customer is issued one contract note per day for all transactions in a segment.

Angel broking Per Contract Note Minimum Brokerage Charges: ₹30 or 2.5% whichever is lower.


How minimum brokerage is calculated?

The above 4 transaction generate total brokerage of ₹0.3645 (0.132 + 0.1325 + 0.05 + 0.05). This is lower than ₹30 minimum brokerage for this contract note.

Minimum Brokerage for this contract note: (263.95 + 265.00 + 2.75 + 2.72) * 2.5% = ₹13.3605

As ₹0.3645 is already charged along with the first 4 transactions; Angel added an additional charge of ₹12.996 (13.3605 - 0.3645).

Customer pays following taxes on this transition:

After taxes customer booked the loss of ₹14.37.


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