Brokerage charges explained

Two categories, and the difference matters

Every charge on an Indian trade falls into one of two buckets:

• Brokerage — set by the broker, kept by the broker. This is the competitive part.
• Statutory and regulatory charges — set by the Government, the exchanges, the depositories and SEBI. The broker collects them and passes them on. These are identical no matter which broker you use.

When a broker advertises a low or nil brokerage, they are talking about the first bucket only. That can still be a real saving. It is not the same as a trade being free.

The charges, one by one

Brokerage

Either a percentage of turnover or a flat fee per executed order, often with a cap. Delivery, intraday and F&O are usually priced differently. Check whether a flat fee is per order or per executed lot — the difference is significant if your orders fill in parts.

Securities Transaction Tax (STT)

A central government tax on securities transactions. The rate and the side it applies to depend on the segment: equity delivery is taxed on both buy and sell, while intraday and futures are taxed on the sell side only. In options, STT applies on the sell-side premium, and separately on exercised contracts. STT is usually the largest single charge on a delivery trade.

GST

Charged on brokerage and on certain regulatory charges — not on the value of the shares. Because it is levied on brokerage, a lower brokerage also means a lower GST amount.

Stamp duty

A state levy applied on the buy side, collected in a uniform centralised manner since 2020. Rates differ by segment.

Exchange transaction charges

Charged by NSE or BSE on turnover, at rates the exchange sets and revises from time to time. Rates differ substantially between segments — options are charged on premium turnover, which is why option charges look large relative to the premium paid.

SEBI turnover fees

A small levy on turnover that funds the regulator. Minor in absolute terms but present on every trade.

DP charges

Applied when shares leave your demat account, which in practice means when you sell delivery holdings. Usually a flat amount per scrip per day, regardless of quantity. This is the charge that most surprises new investors, because it does not scale with trade size.

The practical consequence: selling small quantities of many different stocks is disproportionately expensive. Selling 10 shares each of five companies incurs five DP charges. Selling 5,000 shares of one company incurs one.

Charges outside the trade

• Account opening — one-time, sometimes waived
• Demat AMC — annual, charged whether or not you trade
• Call and trade — for orders placed over the phone
• Auto square-off — when the broker closes an intraday position you left open
• Payment gateway — on certain funding methods
• Pledge and unpledge — if you use holdings as collateral

How to compare honestly

Take a trade you actually place — your typical quantity, your typical price, your typical segment — and price it at each broker including all charges. Comparing headline brokerage alone will mislead you, because the statutory part is identical and often dominates.

For a delivery investor making a few trades a month, AMC and DP charges may matter more than brokerage. For an active intraday trader, per-order brokerage dominates. There is no single cheapest broker; there is a cheapest broker for how you trade.

Use our cost calculator to price a specific trade.