Brokerage Charges & Government Taxes You Need To Know

taxes and charges

When you’re first starting out, you’re told to open a DEMAT account with the broker of your choice. I use Zerodha & Upstox as my primary brokers for now and both are amazing in their own ways so far.

If you still don’t have a DEMAT account, read Upstox vs Zerodha: Which Is Better?

However, you’re never exactly told about the taxes and charges in details.

There are lot more taxes involved other than just the brokerage charges and GST.

What Taxes/Charges Do I Pay While Buying Shares?

Many of you might know or might not know some of this charges and you go crazy when you see the ledger or you just can’t find where some of your money went.

Here’s the list of charges/taxes while you buy the shares on Delivery/Holding

  • Brokerage (Charged by your Broker, usually Rs 0 for delivery if you’re with discount broker)
  • STT/CTT (Securities/Commondities Transaction Charge, levied by Govt. on transaction)
  • Exchange Turnover Charges { Levied by NSE (0.0009%) & BSE (0.000222%) }
  • GST (Applicable on both Transaction Charges & Brokerage)
  • State Stamp Duty (0.003% for most states)
  • SEBI Turnover Fee (0.0000005% of purchase value or Rs 5 per crore)

This is it! Including all of those taxes and charges, you total profit is determined which is called the Net Profit and similarly the same for the Loss which is called the Net Loss.

The profit you’re shown inside the brokers application is just the Gross Profit and after deducting all the taxes and charges, your Net Profit is often shown in the Ledger or your P&L Report.

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Emad is the founder of this blog and is the sole writer & editor on this blog. He has been learning about finance and the stock market for the past 2 years and sharing his experience on his blog and explain complicated topics in simple layman terms.