- Date : 03/10/2022
- Read: 4 mins
- Read in हिंदी: भारत में इंट्राडे ट्रेडिंग शुल्क क्या हैं?
All you need to know about intraday trading charges in India.
Various studies have shown that 70 per cent of traders quit after the first year. Another whopping 95 per cent give it up by the third year. The market has a lot of potential for financial growth. If used the right way, it can add to your wealth. However, the biggest reason for failure can be the lack of adequate knowledge.
Apart from being disciplined about following trading strategies, traders need to be aware of brokerage, taxes, and other charges that incur while executing intraday trades. Intraday trading charges refer to the transaction fees you pay to stock exchanges, tax paid to the government, and the turnover fees given to the Securities and Exchange Board of India (SEBI).
Here is a look at the cost of intraday trading brokerage as well as the total cost of trading.
Different types of intraday trading charges
There are mainly five different types of charges a trader has to pay when involved in Intraday trading. Here are the charges and how they are calculated:
STT (Securities Transaction Tax)
STT is a regulatory charge paid by investors and traders to the Central Government. STT is charged in the contract note issued by a broker and is based on the overall value of a transaction.
STT = 0.025% of (number of shares sold * average price)
Average price is calculated as:
Average price = [(Buy Qty*Buy Price) + (Sell Qty*Sell Price)] / (Buy Qty+Sell Qty)
Brokerage
Brokerage is the commission a broker charges for the services they provide. This intraday trading charge can differ across brokers. Brokerage fees (also called commission fees) are calculated as a percentage of the transaction, a flat fee, or a combination of both. Discount brokerages have become popular over the years as their commissions are cheaper than conventional brokers.
Related: Intraday trading: Frequently asked questions
SEBI regulatory fees
SEBI charges a regulatory fee (also known as SEBI turnover fee) to cover the costs it incurs in carrying out its responsibilities. SEBI charges are now set at Rs 10 crore + GST of the transaction value, or 0.0001 per cent for each equity transaction, whichever is lower.
Transaction charges
Share brokers in India charge a transaction fee for trades made on stock exchanges (BSE, NSE, MCX). Transaction fees, often known as turnover fees, are usually a combination of exchange turnover charges and clearing charges. These vary as per the exchange in which the transaction has occurred.
For instance, NSE charges 0.00345 per cent per transaction and BSE charges 0.00345 per cent per transaction.
Stamp duty
Stamp duty is also one of the intraday trading charges levied while buying and selling shares. It is charged at 0.003 per cent or Rs 300 crore on buy side.
GST
GST is calculated as 18 per cent of the total of brokerage, transaction charges, and SEBI charges.
Related: How gains from intraday trading are taxed
Breakdown of intraday trading charges
Now that you have understood the various charges, let’s see how a leading brokerage (Zerodha) charges for intraday trading. Suppose you are buying 1000 stocks of a certain company at Rs 200 and selling them on the same day at Rs 210.
Quantity of shares: 1000
Buy Price: Rs 200
Sell Price: Rs 210
Therefore, your trading profit would be Rs 210*(1000) – Rs 200*(1000) = Rs 10,000
Related: How to read candlestick charts for informed decisions in intraday trading?
Intraday charges in Zerodha
As per Zerodha’s intraday (equity) calculator, the breakup of intraday trading charges on Zerodha would be as follows:
Therefore, your overall profit would be Rs 10,000 (trading profit) – Rs 123.3 (charges and commission) = Rs 9876.63.
Related: Tomorrow Makers’ Comprehensive eBook on Intraday Trading
Almost all the leading brokers offer intraday equity calculators. Before choosing a broker, it is highly recommended that you use their intraday equity brokerage calculator to figure out whether intraday trading would be profitable for you or not.
Various studies have shown that 70 per cent of traders quit after the first year. Another whopping 95 per cent give it up by the third year. The market has a lot of potential for financial growth. If used the right way, it can add to your wealth. However, the biggest reason for failure can be the lack of adequate knowledge.
Apart from being disciplined about following trading strategies, traders need to be aware of brokerage, taxes, and other charges that incur while executing intraday trades. Intraday trading charges refer to the transaction fees you pay to stock exchanges, tax paid to the government, and the turnover fees given to the Securities and Exchange Board of India (SEBI).
Here is a look at the cost of intraday trading brokerage as well as the total cost of trading.
Different types of intraday trading charges
There are mainly five different types of charges a trader has to pay when involved in Intraday trading. Here are the charges and how they are calculated:
STT (Securities Transaction Tax)
STT is a regulatory charge paid by investors and traders to the Central Government. STT is charged in the contract note issued by a broker and is based on the overall value of a transaction.
STT = 0.025% of (number of shares sold * average price)
Average price is calculated as:
Average price = [(Buy Qty*Buy Price) + (Sell Qty*Sell Price)] / (Buy Qty+Sell Qty)
Brokerage
Brokerage is the commission a broker charges for the services they provide. This intraday trading charge can differ across brokers. Brokerage fees (also called commission fees) are calculated as a percentage of the transaction, a flat fee, or a combination of both. Discount brokerages have become popular over the years as their commissions are cheaper than conventional brokers.
Related: Intraday trading: Frequently asked questions
SEBI regulatory fees
SEBI charges a regulatory fee (also known as SEBI turnover fee) to cover the costs it incurs in carrying out its responsibilities. SEBI charges are now set at Rs 10 crore + GST of the transaction value, or 0.0001 per cent for each equity transaction, whichever is lower.
Transaction charges
Share brokers in India charge a transaction fee for trades made on stock exchanges (BSE, NSE, MCX). Transaction fees, often known as turnover fees, are usually a combination of exchange turnover charges and clearing charges. These vary as per the exchange in which the transaction has occurred.
For instance, NSE charges 0.00345 per cent per transaction and BSE charges 0.00345 per cent per transaction.
Stamp duty
Stamp duty is also one of the intraday trading charges levied while buying and selling shares. It is charged at 0.003 per cent or Rs 300 crore on buy side.
GST
GST is calculated as 18 per cent of the total of brokerage, transaction charges, and SEBI charges.
Related: How gains from intraday trading are taxed
Breakdown of intraday trading charges
Now that you have understood the various charges, let’s see how a leading brokerage (Zerodha) charges for intraday trading. Suppose you are buying 1000 stocks of a certain company at Rs 200 and selling them on the same day at Rs 210.
Quantity of shares: 1000
Buy Price: Rs 200
Sell Price: Rs 210
Therefore, your trading profit would be Rs 210*(1000) – Rs 200*(1000) = Rs 10,000
Related: How to read candlestick charts for informed decisions in intraday trading?
Intraday charges in Zerodha
As per Zerodha’s intraday (equity) calculator, the breakup of intraday trading charges on Zerodha would be as follows:
Therefore, your overall profit would be Rs 10,000 (trading profit) – Rs 123.3 (charges and commission) = Rs 9876.63.
Related: Tomorrow Makers’ Comprehensive eBook on Intraday Trading
Almost all the leading brokers offer intraday equity calculators. Before choosing a broker, it is highly recommended that you use their intraday equity brokerage calculator to figure out whether intraday trading would be profitable for you or not.
