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Transaction Charges by Brokers in India - Explained with Examples

Published on Thursday, August 14, 2014 by Team | Modified on Sunday, August 9, 2020

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Brokers in India stock market charges 'Transaction/Turnover Charges' along with the brokerage and other fees.

1. What is transaction charge and why some brokers charge transaction/turnover fee?

Transaction Charge = Exchange Turnover Charges + Clearing Charges

  • Clearing Charges

    Stock Brokers are registered member of stock exchanges. Stock Exchanges in India offers 4 types of memberships; trading member, Trading Cum Self Clearing Member, Trading Cum Clearing Member and Professional Clearing Member.

    (Note: The definition of the membership types is described in the later section of this article)

    All banks offering 3-in-1 accounts are 'Trading Cum Clearing Member' and clear their own trades.

    Most brokers today prefer to be just 'Trading Member' and clear trades through either a trading cum clearing or a professional clearing member. Those brokers (Trading Member) pay clearing charge to the 'Professional Clearing Members' to clear the trades.

    The clearing charge varies from broker to broker and usually not disclosed to the customers.

    i.e. Discount broker Zerodha is not clearing members at the exchange and uses a third party (ILFS) for clearing services.

  • Exchange Turnover Charges

    BSE, NSE and MCX-SX; the popular stock exchanges in India charges a transaction (or turnover) fee for trade executed with them. Each exchange has its own way to calculate the turnover fee.

    Some of the factors by which this fee varies are:

    • Segment (Equity, Derivatives etc.)
    • Order Type (Active and Passive Orders)
    • Total daily turnover by the broker (in Rs Crore)

    At BSE; the turnover fee is charged by the type of order i.e. passive & active orders.

    • Active Order - For every executed trade, the order (Market Order or Limit Order) which has been matched against an existing order (or Passive Order) will be considered as an Active Order.
    • Passive Order - For every executed trade, the order (Limit Orders) which has been placed first on the basis of the order time stamp assigned by BSE system will be considered as a Passive Order.

Below table shows the fee charged by BSE (Bombay Stock Exchange)

Fees Passive Orders Active Orders
Equity Segment Transaction Fees 0.00225% (Rs 2.25 per 1 Lakh) 0.00325% (Rs 3.25 per 1 Lakh)
Derivatives Segment (Futures) Transaction Fees Nil 0.0005% (Rs.50 per Crore of Trade Value)
Derivatives Segment (Options) Transaction Fees Nil 0.0005% (Rs.50 per crore of Premium Value)

2. Transaction Charge is applicable for what all transactions?

Transaction charges are applicable for all segments including:

  • Equity Segment - Delivery, Intraday, Futures & Options
  • Currency Derivative Segment - Futures & Options
  • Commodity

Note that the rate of transaction charge differs by the exchange and the trading segment.

3. Why does transaction charge varies by exchange and trading segments?

Each exchange has a different way to calculate and charge the transaction fee. Exchanges also compete with each other by keeping the transaction fee low to attract more traders to trade on to their exchanges.

Most exchange also reduces the transaction fees for a broker when the daily volume increase up to a limit i.e. Rs 25,000 crore turnover daily.

Why does transaction charge differ from broker to broker for a particular trading segment?

Each broker in India charge different transaction fee. Below are some of the reasons why it differs from broker to broker:

  • Each broker has different Trade Clearing Cost. If the broker is 'Trading Member' only; they have to pay clearing charge; which varies by clearing member.
  • Brokers who clear their own trades won't have any clearing charges (like the banks), for everyone who clears trade through another member will have clearing charges, and hence the turnover charge varies.
  • Higher daily volume makes the brokers eligible for less 'Exchange Turnover Fee'. As each broker has different daily volume; the turnover fee they pay to exchange differs and thus the transaction charge for customer.

4. Is there a regulation about how much a broker can charge a transaction fee?

There is no regulation or limit on transaction charge being charged by the broker. But there is a new Common contract note regulation from SEBI that says that all charges should be at actual. This regulation effected from August 1st 2014 and will required brokers to provide the detail of the transaction charges in the contract note.

Note that brokers still provide detail about 'Transaction Charge' and do not share separate 'Exchange Turnover Charge' and 'Clearing Charge'.

5. Why do traditional brokers do not publish the transaction charges?

With traditional brokerages, transaction charges usually seem like a very small component and nobody notices, it looks magnified when trading with discount brokers like Zerodha, RKSV or TSO.

But in case of discount broker; the transaction charges looks significant.

Buy 1 lot (50) of NIFTY Future at Rs 7800 at NSE.
Total Transaction: 50x7800 = Rs 390000

Traditional Broker:
ICICI Direct Brokerage = 390000 * 0.05% = Rs 195
ICICI Direct Transaction Charge = 390000 * 0.00185% = Rs 7.20

Discount Broker:
Zerodha or RKSV Brokerage = Rs 20
Zerodha or RKSV Transaction Charge = 390000*0.0021%= Rs 8.20

6. Can a customer negotiate with broker about transaction charge?

No, the customers cannot bargain about transaction charge. The transaction / turnover fee is fixed by the broker. The broker informs the customers about these charges at the time of account opening and whenever they are charged.

Will transaction charges be reduced in future?

Yes there is a higher charge that the transaction charges will reduced in future. The exchange turnover charge is expected to reduce as trade volume increase in future.


Type of membership brokers have with exchange:

  • Trading Member

    This category of membership entitles a member to execute trades on his own account as well as on account of his clients but, clearing and settlement of trades executed through the Trading Member would have to be done through a Trading-cum Clearing Member or Professional Clearing Member of the Exchange.

  • Trading Cum Self Clearing Member

    This category of membership entitles a member to execute trades and to clear and settle the trades executed on his own account as well as on account of his clients.

  • Trading Cum Clearing Member

    This category of membership entitles a member to execute trades on his own account as well as on account of his clients and to clear and settle trades executed by themselves as well as by other trading members who choose to use clearing services of the member.

  • Professional Clearing Member

    This category of membership entitles a member to clear and settle trades of such members of the Exchange who choose to clear and settle their trades through this member.

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6. Chandresh   I Like It. |Report Abuse|  Link|August 21, 2017 10:55:47 PMReply
Unfortunately I have opened account with ventura security

I am new to trading/investing in stock market (I am software engineer by profession in ahmedabad)

I am over charged by stock broker by name of stamp duty and transaction charges which they say are not in their hand and they are of Govt and exchange.

I have opened account in ventura security, baroda by reference of my friend and they communicated only brokerage charges only while opening an account..

10 paisa for delivery and 1 paisa on intra day..

They have never communicated hidden charges..

Now they are not replying emails sent on or

I have wrote almost 10-12 Emails.. NO EMAIL SUPPORT

No good Software always crashes when market is volatile, mobile app is as bad as nothing.

NO PHONE SUPPORT.. I have not heard a single helpful sentence on call.


Before couple of days, I have tried my first purchase. Just trial purchase of BSE Equity delivery,

I received a bill with 113.50 Rs + 2.17% other charges including brokerage, stamp duty and transaction charges + GST on my trial delivery trade. Total 116.18 Rs
Only for Equity Delivery

As per brocker STAMP DUTY for INTRADAY is 0.002% and DELIVERY is 0.01% ( 1 Rs per 10,000 )
Any Minimum or Maximum Stamp Duty Rule on Share trading in Gujarat...

Transaction charge..minimum/maximum any rule on turnover.

I cannot afford non communicated hidden one way).
6.1. A K Shukla   I Like It. |Report Abuse|  Link|September 15, 2019 1:16:45 PM
You may switch over to other brocker. But before that you must give poor rating to your broker giving details of all your concerns regarding poor customer service And keep on giving him poor rating.
5. Manas Ghosh   I Like It. |Report Abuse|  Link|August 27, 2018 3:27:50 AMReply
So, in that above example -

Traditional Broker:
ICICI Direct Brokerage = 390000 * 0.05% = Rs 195
ICICI Direct Transaction Charge = 390000 * 0.00185% = Rs 7.20

Discount Broker:
Zerodha or RKSV Brokerage = Rs 20
Zerodha or RKSV Transaction Charge = 390000*0.0021%= Rs 8.20

If I go with Sharekhan, their transaction charges are flat? Rs. 325? That's huge (Rs. 325) as compared to ICICI direct's Rs. 7.20

Is my understanding correct? What am I missing?
4. R M Leo Paul   I Like It. |Report Abuse|  Link|June 24, 2016 5:38:47 PMReply
can you provided charges levied by Fortune Trading Corporation and other charges as such SEBI charge, Stamp duty, SST, Service tax and statutory charges payable to Exchange/SEBI etc..
3. Kurian joseph   I Like It. |Report Abuse|  Link|June 3, 2016 4:28:09 PMReply
Brokerages like Zerodha are charging much less.. A lot of future in sharekhan comes around RS 300-500 while in Zerodha its only 20x2..

Discount brokerages charges much less its not even mentioned in this article..
pls check zerodha s brokerage
2. Arunachalanadar ganesan   I Like It. |Report Abuse|  Link|April 24, 2015 6:49:11 PMReply
But IIFL charging little more it seems, as per this article it is 0.0038%, but in the application form of IIFL, I came to know that transaction/debit charges is 0.04% and minimum 25 IRS per debit instruction
1. Yash Dalal   I Like It. |Report Abuse|  Link|March 29, 2015 5:21:50 PMReply
The informative article, will help to choose the best broker..!