Understanding STT and Trading Charges
Your net return depends not just on the price move but on the charges. Here’s a breakdown of what you actually pay.
On this page
The headline price move isn’t your real return — charges and taxes take a bite out of every trade. Knowing them helps you trade smarter and avoid surprises.
Securities Transaction Tax (STT)
STT is a tax levied on the value of securities transactions on recognised exchanges, deducted automatically. The rate differs by segment (delivery equity, intraday, and F&O each have their own), and for options it applies differently to premium vs exercised contracts.
The other charges
- Brokerage — your broker’s fee (many charge zero on delivery, a flat fee on intraday/F&O). Estimate with the brokerage calculator.
- Exchange transaction charges — levied by NSE/BSE.
- GST — on brokerage and transaction charges.
- Stamp duty — on purchases.
- SEBI turnover fees and DP charges — a flat fee per scrip on sell from your demat.
Why it matters
For active traders these add up fast and can turn a small “profit” into a loss — another reason overtrading hurts. Your contract note itemises every charge, so review it.
Separate from capital gains tax
STT and charges are transaction costs; the profit you make is additionally subject to capital gains tax (STCG/LTCG). This is general information, not tax advice.
