S4 E6 : UNDERSTANDING BROKERAGE CHARGE, STT, AND TAXES
🎯 Why This Episode Matters:
You might buy a stock for ₹100 and sell it for ₹105, thinking you earned ₹5 profit.
But in reality, you might earn only ₹3.5 or ₹4 — because charges and taxes are involved.
Let’s understand them one by one, with real numbers.
🧾 1. Brokerage Charges (By Brokers like Zerodha, Groww, etc.)
When you trade, brokers charge a brokerage fee. It’s how they earn.
Most Discount Brokers (like Zerodha) charge:
₹0 for delivery trades (when you buy and hold)
₹20 or 0.03% (whichever is lower) per intraday/F&O trade
Example:
You do an intraday trade worth ₹10,000.
0.03% of ₹10,000 = ₹3 → You pay ₹3 as brokerage.
🏛️ 2. STT – Securities Transaction Tax
Charged by the Government of India.
Charges:
Delivery buy: 0%
Delivery sell: 0.1% of the sell value
Intraday: 0.025% on the sell side
Futures: 0.01% on sell
Options: 0.05% on sell
Example:
You sell Reliance shares worth ₹50,000 (delivery):
- STT = 0.1% of ₹50,000 = ₹50
🪙 3. Exchange Transaction Charges
Charged by NSE or BSE for using their platform.
- NSE Equity: Around 0.00345% of turnover
- It’s a small fee, but it adds up if you trade often.
📉 4. SEBI Charges
Charged by the regulator SEBI for monitoring trades.
- Very small: ₹10 per crore of turnover.
🧮 5. Stamp Duty (State-wise)
Charged on buy transactions only.
Around 0.015% for delivery trades (varies slightly by state)
🧮 6. GST
Charged on brokerage + transaction charges
GST = 18% of (brokerage + exchange charges)
💼 7. Capital Gains Tax
Charged on the profit you make when you sell shares.
Two Types:
a) Short-Term Capital Gains (STCG):
-
If you sell within 1 year.
-
Taxed at 15% of your profit.
b) Long-Term Capital Gains (LTCG):
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If you hold >1 year.
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Profits above ₹1 lakh per year are taxed at 10%.
🧠 Delivery Trade Charges — Simple Breakdown
-
Brokerage: ₹0
(Free in delivery trades)
-
STT (Sell): 0.1%
Example: ₹50 on ₹50,000 sale
-
Exchange Fees: 0.00345%
Roughly ₹1.72
-
SEBI Fees: ₹10 per crore
Negligible for small trades
-
Stamp Duty: 0.015% on buy side
Example: ₹7.5
-
GST: 18% on charges
Example: ₹0.5 to ₹2
-
Capital Gains Tax: 10% or 15%
Applies only on profit made
✅ Final Tip
🧾 Always check contract notes after every trade — your broker sends it. It shows all charges clearly.
🧮 Tools like Zerodha’s charges calculator can help you know exactly how much you’ll pay before trading.