What is STT and who pays it?

STT (Securities Transaction Tax) is a direct tax levied by the Government of India on the purchase and sale of equity shares, mutual fund units, and derivatives on a recognised stock exchange. For equity delivery trades, STT is 0.1% each on the buy and sell sides. For intraday equity trades, it is 0.025% on the sell side only. STT is automatically deducted by the exchange and reflected in your trade contract note - you do not need to pay it separately. It cannot be claimed back and is not an expense against salary income, but it can be set off against speculative business income in certain cases.

Why is GST charged on brokerage?

GST is charged because brokerage and exchange transaction charges are classified as financial services under the GST framework, not securities transactions. The actual buying and selling of shares is exempt from GST, but the service provided by the broker (executing your trade) and the exchange (providing the infrastructure) is taxable. The current GST rate on financial intermediary services is 18%. This is applied to brokerage + exchange transaction charges + SEBI charges. STT and stamp duty are government levies, not services, so they are outside the GST net.

How do delivery charges differ from intraday charges?

Delivery trades involve taking actual ownership of shares - they are held in your Demat account after settlement (T+1 in India). Intraday trades are opened and closed within the same trading session without actual delivery of shares. The key charge differences are: (1) STT for delivery is 0.1% on both buy and sell sides, whereas for intraday it is 0.025% on the sell side only; (2) Stamp duty for delivery is 0.015% on the buy side, versus 0.003% for intraday; (3) Many brokers charge higher brokerage for delivery than for intraday. Delivery trading typically has slightly higher charges per trade but is better suited for medium-to-long-term investing.

How can I reduce my total brokerage and charges?

The most effective way to reduce trading costs is to switch to a discount broker that charges a flat fee (e.g., ₹20 per order) rather than a percentage of turnover. Statutory charges like STT, stamp duty, exchange charges, SEBI charges, and GST are non-negotiable and apply uniformly regardless of your broker. Beyond broker selection, trading in fewer, larger lots (instead of multiple small orders) reduces the fixed brokerage component per unit. Long-term investors who hold for months or years pay significantly less in cumulative charges than frequent traders because each round trip (buy + sell) incurs a full set of charges.

Brokerage Calculator

What are Brokerage Charges?

Brokerage charges are fees paid to a stockbroker for executing buy and sell orders on your behalf. In India, two main types of brokers operate: full-service brokers (who offer research, advice, and portfolio management at higher fees) and discount brokers (who offer flat-fee or zero-brokerage plans). Brokerage is just one of several charges levied on every stock trade - and knowing all of them is essential to accurately assess your true profit or loss.

This calculator aggregates all statutory and regulatory charges - STT, exchange transaction charges, SEBI charges, GST, and stamp duty - alongside your brokerage to show your true net P&L after every trade.

Securities Transaction Tax (STT)

STT is a direct tax levied by the Government of India on the purchase and sale of securities listed on recognised stock exchanges. The rates differ based on the type of transaction:

Equity Delivery (buy): 0.1% of transaction value
Equity Delivery (sell): 0.1% of transaction value
Equity Intraday (sell only): 0.025% of transaction value
Futures (sell): 0.0125% of transaction value
Options (sell on premium): 0.0625% of premium value

For delivery trades, STT applies on both the buy and sell sides. For intraday, it applies only on the sell side. STT is automatically deducted by the exchange and reflected in your contract note.

Exchange Transaction Charges

Stock exchanges (NSE and BSE) levy transaction charges on all trades to cover their operational costs and regulatory obligations. These are expressed as a percentage of turnover:

NSE Equity: 0.00345% of total turnover
BSE Equity: 0.00375% of total turnover

Although small in percentage terms, exchange charges can add up on high-volume trades. They are non-negotiable and apply uniformly to all market participants.

SEBI Charges

The Securities and Exchange Board of India (SEBI) levies a regulatory fee on all market transactions. The charge is ₹10 per crore of turnover (or ₹0.000001 per rupee of turnover). This fee funds SEBI's regulatory activities and investor protection initiatives. For most retail investors, SEBI charges are negligible per trade but add up for high-frequency or institutional traders.

GST on Trading

Goods and Services Tax (GST) at 18% is levied on the service components of your trade - specifically on brokerage, exchange transaction charges, and SEBI charges combined. GST does not apply to STT or stamp duty, as those are statutory levies, not service fees. The 18% GST can noticeably increase your total charge burden, especially for high-brokerage structures.

Stamp Duty

Stamp duty is levied by state governments on the transfer of securities. Post the 2020 consolidation, stamp duty in India is collected uniformly at the national level and is calculated on the buy side only:

Equity Delivery (buy): 0.015% of buy-side turnover
Equity Intraday (buy): 0.003% of buy-side turnover

Stamp duty applies only on the purchase leg of the trade and is capped at ₹1,500 per instrument per day.

How to Reduce Your Trading Costs

Choose a discount broker: Platforms like Zerodha, Groww, or Upstox offer flat ₹20 brokerage per order, vastly reducing costs versus percentage-based models for large trades.
Opt for delivery over intraday: Delivery trades have lower brokerage in many flat-fee plans, and you avoid overnight position risk.
Trade in larger lots: Fixed brokerage costs are proportionally lower when spread across more shares in a single order.
Avoid frequent churning: Every round trip (buy + sell) doubles your brokerage, STT, and stamp duty exposure. Long-term investors accumulate far less in charges.
Use limit orders: Limit orders can be split into fewer executions than market orders, reducing partial-fill brokerage charges.

Advantages of Knowing Your Brokerage Costs

Accurate P&L tracking: Most traders forget to account for all charges and overestimate profits. Knowing exact costs gives you a realistic picture.
Better breakeven planning: The calculator shows you the exact price the stock needs to reach just to cover all charges - a critical number for short-term traders.
Broker comparison: By changing the brokerage input, you can instantly compare the impact of different brokerage structures on your bottom line.
Tax preparation: STT paid is deductible for speculative income. Knowing the exact STT helps when filing income tax returns for trading activity.