Different Charges on Share Trading Explained- Brokerage, STT & More

Different Charges on Share Trading

Different Charges on Share Trading Explained. Brokerage, STT, DP & More- There are a number of charges involved while trading in India i.e. buying or selling of shares. Some of them are common like brokerage charge & STT, while there are many whom the investors are not afraid of. In this post, I am going to explain all of the different charges on share trading. Some of them are brokerage charge, Security transaction charge, stamp duty etc. But before we learn about them, there are few basics things that we need to understand first.

So, be with me for the next 8-10 minutes to understand the explanation of all the different charges on share trading.

Following are the things that you need to know first:

1. Intraday Trading and Delivery:

  • When you buy & sell a share on the same day, then it’s called an Intraday trading. For example, you bought a share in the morning and sold it before the market closes on the same day, then it will be considered as an intraday
  • On the other hand, when you buy a share and hold it for at least one day, then it’s called a delivery. For example, you bought a share today and sold it any day but today then it will be considered it as a delivery. Here you can sell the stock tomorrow, or the day after that, or a week later, a year later or 20 years later.

 2. Full-Service Brokers and Discount Brokers:

  • Full-Service brokers are the traditional brokers who offer full-service trading like stocks, commodities, currency along with research and advisory, sales and asset management, investment banking all in one account. For example, ICICI Direct, Kotak Securities etc.
  • Discount brokers are who offer high speed and the state-of-the-art execution platform for trading in stocks, commodities and currency derivatives. They charge a reduced commission and do not provide investment advice. For example, Pro stocks, Zerodha, Trade Smart Online etc.
  • In general, a full-service broker charge between 0.01% – 0.50% brokerage charge on Intraday and delivery.
  • The discount brokers charge a flat fee (fixed fee of Rs 10 or Rs 20 per trade) on intraday and delivery trading. There are also a couple of discount brokers who do not charge any fee on delivery trading.

It is important to note that you have to pay a brokerage charge on both times of trading i.e. while buying a share and selling a share. There are some brokers (very few) who charge brokerage fee only at one side of transaction i.e. either on buying or selling.

Let’s take an example to understand the brokerage charge better. Suppose there is a brokerage firm called – ABC. Now, ABC charges a brokerage fee of 0.05% on intraday trading and 0.30% on delivery trading. The total charges on both tradings can be given as-

Intraday Trading Delivery
Brokerage charge= 0.05% of total turnover Brokerage charge= 0.30% of total turnover
If we buy a single stock worth Rs 100, then
Brokerage charge = 0.05% of Rs 100 = Rs 0.05
If we buy a single stock worth Rs 100, then brokerage charge = 0.30% of Rs 100 = Rs 0.30
Total brokerage charge on trading (for both buying and selling) = 2 * 0.05 = Rs 0.10 Total brokerage charge on trading (for both buying and selling) = 2 * 0.30 = Rs 0.60

As the competitions in the brokers are increasing, the brokerage charges are decreasing. In coming days, these rates can even reduce further.

Apart from brokerage charge, there are also an additional couple of charges and taxes to be paid while share trading. For example, Security transaction tax, service tax, stamps duty, transaction charges, SEBI turnover charges, depository participant (DP) charges and capital gain tax.

Let’s understand the other different charges on share trading and taxes involved first. Then we will see an example for further understanding.

Different Charges on Share Trading-

Security Transaction Tax (STT):

  • This is the second biggest charge after the brokerage charge.
  • For delivery trading, STT is charged on both sides (buy & sell) of trading.
  • For intraday trading, STT is charged only when you sell the stock.
  • In general, for delivery, the STT charge is around 0.1% of total transaction (on each side of trading)
  • For intraday, the STT charge is around 0.025% of the total transaction (while selling).

Service Tax:

It is same for intraday and delivery trading. Service tax is equal to the 15% of whatever brokerage charge you paid.

Stamp Duty:

This is charged by the state government. Different states have different stamp duty. Here is the stamp duty of two of the Indian states-

  Intraday Delivery
Maharashtra 0.002% 0.01%
Delhi 0.0025% 0.0025%

Stamp duty is also charged on both sides of trading (buying & selling) and are charged on the total amount (turnover).

Transaction Charges:

  • This is charged by the stock exchanges. Transaction charges are charged on both sides of the trading and are same for both intraday & delivery.
  • National stock exchange (NSE) charges a transaction fee of 0.00325% of the total amount.
  • Bombay stock exchange (BSE) charges a transaction fee of 0.00275% on total amount.

SEBI Turnover Charges:

  • Here, SEBI stands for Securities exchange board of India and it is the security market regulator. SEBI makes the rules and regulations for the exchanges.
  • It is charged on both sides of transaction i.e. while buying and selling.
  • The SEBI turnover charge is 0.0002% of the total amount and is same for both intraday and delivery trading.

Depository Participant (DP) Charges:

  • There are two stock depositories in India- NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited).
  • Whenever you buy a share, it is kept in an electronic form in a depository. For this service, the depositories charge some fixed amount.
  • They don’t charge the investors directory but charge the depository participant. Here, the broker company or your demat account company is the depository participant (DP).
  • DP acts as a linkage between the depository and the investor as the investors cannot approach depository directly. So, overall the depository charges the depository participant and then the depository participant (DP) charges the investors.
  • DP charges are a flat of between Rs 10 to 35 depending on your broker and this is also charged only for delivery trading (not for intraday)

Capital Gain Tax:

  • This is the most important tax to understand for a trader.
  • There are two types of Capital gain tax – Short-term capital gain tax and Long-term capital gain tax.
  • When you sell a stock before 1 year of buying, then it is considered as a Short-term. Here a flat 15% of the profit is charged as short-term capital gain tax.
  • When you sell a stock after 1 year of buying, then it is called long-term capital gain tax. There is no tax on long-term capital gain.
  • For a short-term capital gain tax, the delivery trader has to pay flat 15% and it doesn’t matter what tax slab they are in. But this doesn’t apply to an intraday trader as they have to pay capital gain tax according to their tax slab.
  • As the long-term capital gain tax is nil, the big investors try to get maximum profit from it by investing for long term.

If you want to read further in details, I will recommend you to read this book: Everything You Wanted to Know About Stock Market Investing -Best selling book for stock market beginners. 

Now, let us see an example to understand these different charges on share trading and taxes involved better. Suppose there are two traders- Rajat and Prasad. Here Rajat is a delivery trader who invests in long-term i.e. for 2-3 years. On the other hand, Prasad is an intraday trader.

They both have their accounts in same brokerage company named ABC. The brokerage charge for ABC is 0.05% on intraday trading and 0.30% on delivery trading. Also, let us suppose that both Rajat and Prasad have invested a total of Rs 10,000 in the shares of Tata Motors. In addition, they both live in Maharastra.

Now the different charges and taxes paid by them for complete trading i.e. from buying to selling the shares can be given as-


Delivery Trader (Long term)

(Intraday Trader)
Total Investment Rs 10,000 Rs 10,000
Exchange NSE NSE
Brokerage Charge 0.30% of Total Amount
= 0.30% of Rs 10,000 = Rs 30
Total brokerage charge= 2*30 = Rs 60
0.05% of Total Amount
= 0.0% of Rs 10,000 = Rs 5
Total brokerage charge= 2*5 = Rs 10
STT 0.1% of total amount
= 0.1 % of Rs 10,000 = Rs 10
Total STT = 2*10 = Rs 20
0.025% of total amount
= 0.025 % of Rs 10,000 = Rs 2.5
Total STT = 1*2.5 = Rs 2.5
Service Tax 15% of brokerage charge
=15% of Rs 60 = Rs 9
15% of brokerage charge
=15% of Rs 10= Rs 1.5
Stamp Duty (Maharashtra) 0.01% of total amount
= 0.01% of Rs 10,000= Rs 1
Total stamp duty = 2*1= Rs 2
0.002% of total amount
= 0.002% of Rs 10,000= Rs 0.2
Total stamp duty = 2*0.2= Rs 0.4
Transaction Charges 0.00325% of total amount
= 0.00325% of Rs 10,000= Rs 0.325
Total stamp duty = 2*0.325= Rs 0.65
0.00325% of total amount
= 0.00325% of Rs 10,000= Rs 0.325
Total stamp duty = 2*0.325= Rs 0.65
SEBI Turnover Charge 0.0002% of total amount
= 0.0002% of Rs 10,000= Rs 0.02
Total stamp duty = 2*0.02= Rs 0.04
0.0002% of total amount
= 0.0002% of Rs 10,000= Rs 0.02
Total stamp duty = 2*0.02= Rs 0.04
DP Charge Rs 15 NIL
Capital Gain Tax 0 Pays according to tax slab


Overall, here is the summary of all the charges and taxes paid by Rajat and Prasad.

  Rajat Prasad
Brokerage Charge Rs 60 Rs 10
STT Rs 20 Rs 2.5
Service Tax Rs 9 Rs 1.5
Stamp Duty (Maharashtra) Rs 2 Rs 0.4
Transaction Charges Rs 0.65 Rs 0.65
SEBI Turnover Charge Rs 0.04 Rs 0.04
DP Charge Rs 15 0
Capital Gain Tax 0 Pays according to tax slab
Total Charges Rs 106.69 15.09 + Capital Gain Tax

On the first glance, it looks cheap to invest in intraday as the total charges are comparatively less here. But you should note that the frequency of trading for intraday traders is quite high. So, they have to pay these charges again and again.

Also, let us take a scenario where Prasad chooses to sell his stocks after 2-3 days as the prices were quite low on that day and he was expecting some price increase on next days. In such case, Prasad turns from an intraday trader to delivery trader. Hence, his total charges also changes from Rs 15.09 to Rs 169.69.

Let us also assume that Prasad makes a profit of Rs 100 on selling. So, the capital gain tax that he has to pay will be equal to 15% of Rs 100 i.e. Rs 15. Now his situation turns out like this-

Total Charges Rs 106.69
Short term capital gain tax Rs 15
Total Charges Rs 124.63
Profit Rs 100

Here, although Prasad’s profit is Rs 100, still his expenditure is Rs 124.69 on different charges. Overall, Prasad is in loss of Rs 24.69.

Hence, charges and taxes are a very important part of trading and should not be ignored. You might think that you are in profit, but the real profit is the one which is left after deducting the charges and profit. I hope the traders will keep this in mind before trading the next time.

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Tags: Different Charges on Share Trading Explained, Different Charges on Share Trading Intraday, Different Charges on Share Trading long term, Different Charges on Share Trading in delivery trading, common different Charges on Share Trading 

About Kritesh Abhishek 206 Articles
Hi, I am Kritesh, an NSE Certified Equity Fundamental Analyst. I'm 23-year old and an electrical engineer (NIT Warangal) by qualification. I have a passion for stocks and have spent my last 4+ years learning, investing and educating people about stock market investing. And so, I am delighted to share my learnings with you. #HappyInvesting (Connect with me over twitter here).


  1. Dear Mr. Kritesh,
    Very educative article for novice. I am doing short term trading for last one year and not knowing fact taxes. When I did calculation back on my profit (What I was thought) observed no profit at all after deducting the tax at the rate of 15% on delivery trading. Your article would definitely help and assist to know the profit and whether selling the share would be profitable or not. HATS UP!!! Thank you very much!

  2. Thanks a lot for sharing this post. It gives a summary of tatal expenses incurred on one’s turnover. The post is very illustrative and well explained. I was looking for such summary of all taxes and charges and their comparative analysis for intraday and long term investment.

  3. Explained in very simple words. Normally we beginners won’t give any credential to various charges and tax while looking at profit.

  4. Dear Krit,
    Surely, Well done.
    A good job with good intention and thanks a lot ….
    very helpful tips provided and anticipating such always!
    Best wishes,

  5. Dear Krit,
    I have bought a scrip and on the 3rd day the broker informing that they are unable to deliver the same, due to short delivery and they may be credit the purchase amount to me.
    NB:in those 2 days the scrip has been appreciated by about 10% (2 upper circuit)
    How such cases are treated by NSE/BSE? what I understand is, any short delivery quantity will be auctioned by the exchange on the delivery day at that day’s price and will be delivered to the buyer AND the auctioned amount will be debited to the seller.
    Could you please update whether the above is the right way OR any other methos is there as per BSE/NSE or SEBI norms?
    please advise.

  6. sir if i puchase shares of rs 2000 @10/- per share and sale at 11/- after1 month then what will be the charges
    and please share whether it is profitable or loss deal

    • Hi Vijay. What I get from your comment is that your Buying price= Rs 10, Selling Price= Rs 11, Quantity=2000.
      Let’s assume total charges of 0.6% (Brokerage, GST, stamp duties etc) which is applicable on both sides of transactions i.e. buying and selling. (The charges will differ for discount brokers).
      Therefore, charges while buying = 0.006* (20,000) = Rs 120
      Charges while selling = 0.006* (22,000)= Rs 132
      Now, Your net profit will be Rs 2000 (10% capital gain as the stock rises from Rs 10 to Rs 11).
      Next after selling, you have to pay a short-term capital gain tax of 15% = 15% of 2000= Rs 300
      Overall, you will make profit of Rs 2000 – (Capital gain taxes + charges) = Rs 1450 (Approx)
      I hope it helps.

  7. Hi Kritesh, excellent articles you have written on stock market. it is really very helpful & knowledgeable articles those who are interested to invest in stock market.

  8. Hi Kritesh, Nice Article. A small suggestion is to elaborate on intraday charges based on stock price, any specific charges for after hour orders, penalty where applicable, etc..

  9. Hi.. Nice article. All types of charges nicely explained by you. Thank you for the same. I still have a query, if you could advise on the same, recently i sold my shares of about 30 companies total worth of Rs 81000/-. I received an invoice from my broker where in i was charged Rs 100 per company held be me, i.e. 30 companies x Rs 100 = Rs 3000.

    NOTE: These shares were held by me for over 12 months.

    Are there such charges over and above the brokerage & other charges, that the brokerage can charge its customers?

    Please advise.


    Milind Chari

    • Hi Milind. I’m not aware of any such charges. Further, in any transaction, the biggest charge is brokerage- which cannot exceed 2.5% (as per SEBI guidelines). This charge is even bigger than brokerage. If you can share the invoice, I can give you a confident answer. You can contact me on facebook here.

  10. i m new to investing in shares…..would like to know meaning of ” pay falt Rs.20/- brokerage per lot of options”…..

    • Hi Mithun. I’ll explain in in simple words. Flat rates means that the brokerage doesn’t depends much on the investment amount. For example, if a full-service broker is charging 0.5% per transaction, this means that the brokerage for a transaction of Rs 10,000 and Rs 50,000 will be different- 0.5% of both the costs. However, for flat charges, the brokerage is same i.e. Rs 20 for all these transactions. I hope it helps. Cheers!

  11. very very informative, even being there in the same industry since last 10years never gave much attention to those charges.
    Thanks a lot for highlighting those charges.

  12. I appreciate your efforts of educating the mass. An informative article indeed. Want to know and learn how to pick good equities for long time on monthly basis.thanks sir

  13. Sir can you please confirm on STCG and LTCG tax. I read from some other sites that even LTCG are taxable as of now.

    Also, is it that any amount of profit we make is taxable ? Or only if our returns are greater than 1L then it is taxable ? As in banks and FDs.

    Pls confirm.

    • Hi Akshay, both Short term and long term gains from equity are taxable now. For short-term, the tax is 15% on the profits. For long term, the tax is 10% for profits above Rs 1 lakhs. I hope it helps. Cheers!!

  14. Nice article Mr.Kritesh Abhishek. Very much helpful for a beginners like me.
    After paying all the brokerage charges, at the end of year during IT returns again we have to pay IT based on P&L. With this can you please suggest as a thumb rule if one has to sell what should be min margin so that there won’t be any loss

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