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STT (Securities Transaction Tax) is a government levy, while brokerage is the fee your stockbroker charges for executing and servicing trades. Your contract note can also include exchange transaction charges, SEBI turnover fees, stamp duty, GST and, for some delivery transactions, a depository-participant (DP) fee. Each line has a different calculation base, payer and effective date, so comparing brokerage alone can give a misleading view of your actual return.
This guide explains what each charge means, which side of a trade pays it, how the published rates apply to equity and derivatives, and how to reconcile the total with your broker tariff and contract note. The statutory examples use the National Stock Exchange schedule marked updated 17 April 2026, with rates effective 1 April 2026; your instrument, exchange, broker and later rule changes may produce a different result.
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| Name | Best for | Key spec | Checked |
|---|---|---|---|
| STT | Understanding the statutory tax on specified securities transactions | Delivery equity: 0.100% on purchase and sale; other rates depend on instrument and side | November 2026 |
| Brokerage | Checking what your broker charges for its service | Set by the broker tariff; may be percentage-based, per order or per lot | November 2026 |
| Exchange and SEBI levies | Reconciling exchange and regulatory lines | SEBI turnover fee for securities other than debt: 0.0001% of price (₹10 per crore) | November 2026 |
| Stamp duty | Identifying the transaction-side state levy | Delivery equity: 0.015% on buyer; non-delivery equity: 0.003% on buyer | November 2026 |
| GST | Understanding tax on broking services | 18% is listed for stockbroker services; treatment of pass-through levies follows valuation rules | November 2026 |
| DP charges | Explaining a depository debit on delivery sales | Provider-specific charge, normally shown separately in the tariff or contract note | November 2026 |
Prices checked November 2026.
Rates and descriptions are examples from published schedules, not a universal quote. Confirm the applicable date, instrument and broker tariff before trading.
What is STT?
STT is a statutory tax imposed on specified purchases and sales of securities. It is not payment for advice, order routing or account maintenance: the obligation arises from the transaction type defined in the tax rules. The exchange schedule lists separate rows for delivery equity, non-delivery (intraday) equity, futures, options sold and options exercised, so there is no single STT rate for every trade.
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For the NSE schedule effective 1 April 2026, delivery equity carries 0.100% on the purchase and 0.100% on the sale. A non-delivery equity sale carries 0.025%. The same schedule lists 0.15% of option premium on an option sale and 0.05% on a futures sale; exercise treatment is shown separately. Read the complete NSE table of STT and other levies rather than applying an equity-delivery rate to a derivative.
STT is generally collected through the market infrastructure and appears as its own line on the contract note. The rate is applied to the base specified for that transaction, such as securities value or option premium, not automatically to every number on the statement. Always record the schedule’s “effective from” date; the NSE page also displays earlier rates, which can otherwise be mistaken for current ones.
What is brokerage?
Brokerage is the stockbroker’s charge for providing broking services and executing exchange orders. Unlike STT, it is a commercial charge set under the broker’s disclosed tariff, subject to applicable regulatory limits and contract terms. SEBI says that all stock brokers must provide a tariff sheet to every client at onboarding. Keep that sheet and check any later notification of a changed plan.
A tariff may use a percentage of turnover, a fixed amount per executed order, a per-lot amount, or different rules for delivery, intraday, futures, options and account services. “Zero brokerage” in one segment does not mean that statutory taxes, exchange fees, GST or DP charges disappear. A plan can also have a minimum charge, a maximum cap, or a separate fee for an order that is executed in multiple fills; the exact wording controls.
For derivatives, SEBI’s March 2023 FAQ states that brokerage is charged on the option premium, not the strike price, and records a ceiling of 2.5% of premium or ₹100 per lot, whichever is higher. The FAQ also says brokerage in derivatives can be charged only for trades executed on the stock exchange, not merely because a contract expires, is exercised or is assigned. Because this is a dated FAQ, verify the current rule and your tariff before relying on either statement.
What other charges are in my contract note?
A contract note separates charges because different entities collect them. The exact labels vary, but the following categories cover the lines most Indian retail traders encounter.
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| Charge | What it pays for | Typical base or side | Who sets or collects it |
|---|---|---|---|
| Exchange transaction charge | Use of the exchange’s trading infrastructure | Usually linked to turnover; rate depends on exchange and segment | Exchange, collected through the broker |
| SEBI turnover fee | Securities-market regulation | For securities other than debt, NSE lists 0.0001% of price (₹10 per crore) | SEBI, collected through market intermediaries |
| Stamp duty | State stamp levy on the purchase transaction | NSE’s example: 0.015% for delivery equity and 0.003% for non-delivery equity, on the buyer | Applicable state law, collected through the market system |
| GST | Tax on taxable stock-broking services | 18% is the rate listed for stockbroker services; valuation depends on taxable service value | Government, charged by the broker where applicable |
| DP charge | Depository instruction for debiting securities from a demat account | Usually a provider-specific amount on a delivery debit or other demat event | Depository participant |
| STT | Statutory transaction tax | Instrument-, settlement- and side-specific | Government, collected through the broker |
These lines are not interchangeable. An exchange fee is not a tax; a DP fee is not brokerage; and STT is not a substitute for stamp duty. The total debit is the sum of the lines that apply to your exact trade.
How are the rates applied to a trade?
Start with five questions: What instrument? What settlement type? Which side? What monetary base? and Which effective date? The answer determines whether a charge is assessed on turnover, premium, a fixed order or lot, and whether the buyer, seller or both pay it.
- Classify the trade. Mark it as delivery equity, non-delivery/intraday equity, futures, an option sale, an option exercise or another instrument shown in the schedule.
- Calculate each leg’s base. For equity this is generally the applicable traded value; for an option sale, the NSE STT row uses premium. Do not substitute a contract’s notional or strike price unless the schedule says to.
- Apply the side rule. Delivery-equity STT is listed on both purchase and sale, while the cited stamp-duty examples are on the buyer. A seller-only line cannot be copied to the buy leg.
- Apply the broker tariff. Use the executed quantity and fills, not a marketing headline. Note minimums, caps, per-order rules and segment-specific rates.
- Add taxes and pass-through charges. GST is calculated on taxable service value under the applicable valuation rules; it is not simply 18% of total securities turnover.
If a line cannot be matched to a tariff, exchange schedule or statutory schedule, ask the broker for an explanation before treating it as an error.
How do trading charges change returns?
Charges reduce the cash retained from a profitable trade and increase the amount lost on an unprofitable one. A simple reconciliation is:
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Net result = sale proceeds − purchase cost − all applicable charges
For a short-term or low-margin strategy, fixed per-order charges can matter as much as percentage levies because they recur on each executed order. For a larger delivery position, a percentage-based STT or stamp duty can dominate the small regulatory fee. The relevant comparison is your complete “all-in” cost, not brokerage in isolation.
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Illustrative delivery-equity calculation
Assume, solely to demonstrate the mechanics, a delivery purchase of ₹100,000 and a sale of ₹110,000, both on or after 1 April 2026. Using the NSE examples:
- STT on purchase: 0.100% × ₹100,000 = ₹100.
- STT on sale: 0.100% × ₹110,000 = ₹110.
- Stamp duty on buyer: 0.015% × ₹100,000 = ₹15.
- SEBI turnover fee: 0.0001% × ₹210,000 total value = ₹0.21.
These four lines total ₹225.21. The gross price difference is ₹10,000, so the amount after only these listed items would be ₹9,774.79 before brokerage, exchange transaction charges, GST, DP charges and any other applicable line. This is not a broker quote or a prediction of a typical investor’s return; it simply shows why every applicable line must be included.
For an option, repeat the process with the premium base where the schedule requires it. Do not calculate option brokerage or STT from the strike price merely because it is the most visible number in an option chain.
How do I read and check a contract note?
A contract note is the primary record for reconciling an executed trade. Use this sequence after each statement is issued:
- Confirm identity and period. Check your client ID, order date, trade date, settlement number and the exchange or segment.
- Match executions. Compare quantity, price, buy/sell side and each fill with your order history. Partial fills can create several brokerage calculations.
- Recompute turnover. Add the value of each buy and sell leg separately; do not assume that “turnover” means the same base for every charge.
- Locate statutory lines. Identify STT, stamp duty and SEBI turnover fee. Verify the instrument and effective-date row against the current NSE levy schedule or the applicable exchange schedule.
- Check the tariff. Compare brokerage and any account, order, call-and-trade or demat fee with the tariff sheet supplied at onboarding. Ask for written clarification if the contract note uses an unfamiliar abbreviation.
- Check GST separately. Confirm the taxable service amount and GST line rather than multiplying total turnover by 18%.
- Reconcile the net amount. The contract note’s payable or receivable amount should equal trade value adjusted for every listed charge and credit.
Keep contract notes and tariff versions together. If a dispute remains, raise it promptly through the broker’s support and formal grievance channel, retaining the original documents.
How does GST apply to brokerage and pass-through levies?
GST applies to the taxable stock-broking service, with 18% listed for stockbroker services in the NSE schedule. It is not correct to assume that 18% is charged on the entire value of shares or derivatives traded.
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CBIC’s stock-broking FAQ explains that GST is not payable on STT or stamp-duty recoveries when the broker satisfies the pure-agent conditions. If those conditions are not met, the valuation rules determine what enters the taxable value. Therefore, inspect the brokerage, exchange-service and other recoveries shown on your note instead of applying a blanket formula. The CBIC sectoral FAQ provides the relevant treatment.
How are these charges different from capital-gains tax?
Transaction charges arise when the trade is executed; capital-gains tax is a separate income-tax question based on the eventual transfer and your tax circumstances. Do not merge the broker’s per-trade total with the tax you may owe on annual gains.
The Income Tax Department’s guidance on tax on sale of shares and capital gains discusses holding periods, rates, thresholds and certain expenses connected with a transfer. Whether a particular cost is deductible in a capital-gains computation depends on the applicable provision and transfer date. Keep the contract note, but obtain current tax advice for your return rather than treating the contract-note total as your final tax liability.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should I compare when choosing a trading account?
Compare the complete schedule for the trades you actually place. A useful checklist is:
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- Brokerage basis: percentage, per order, per lot, minimum or maximum.
- Order behavior: whether partial fills, amendments or cancelled orders create separate charges.
- Statutory pass-through: STT, stamp duty, SEBI fee and exchange charges are still payable where applicable.
- Demat events: DP debit fees and other account charges for delivery sales or transfers.
- GST treatment: the service amount and how pass-through recoveries are handled.
- Effective date: whether the tariff and statutory schedule were current when the trade occurred.
- Disclosure: whether you can download a clear tariff and itemised contract note.
Use one hypothetical trade matching your strategy and plug in each provider’s published tariff. That comparison is more meaningful than ranking accounts by a single advertised brokerage number.
Common mistakes and how to fix them
- Using yesterday’s rate: Recheck the schedule’s effective date; rates can change by instrument and policy update.
- Applying delivery STT to intraday or derivatives: Select the exact row for settlement type and instrument.
- Calculating option costs from strike price: Use premium where the schedule or tariff specifies it.
- Calling every line “brokerage”: Separate broker service, exchange, regulatory, tax and DP charges.
- Multiplying turnover by 18% for GST: GST is on taxable service value, with pass-through rules; consult the CBIC explanation.
- Ignoring the sell side: Delivery STT and other charges can apply differently to purchase and sale.
- Confusing costs with capital-gains tax: Reconcile the contract note first, then address annual tax separately.
- Trusting a headline plan: Read minimums, caps, per-order rules and the dated tariff.
How we picked the comparisons
The comparison uses the distinctions established in the NSE levy schedule, SEBI’s broker FAQ, CBIC’s GST guidance and the tax authority’s capital-gains explanation: who imposes the charge, what base is used, which side pays, which instrument and settlement type triggers it, and whether the amount is broker-specific or statutory. Provider schedules are useful only for confirming that brokers disclose their own tariffs; they are not a complete ranking of brokers.
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What is the practical takeaway?
Before placing a trade, identify the instrument and settlement type, read the current broker tariff, and estimate every applicable line in the contract note. After execution, reconcile the note rather than judging the trade by brokerage alone. This approach shows the amount that actually reaches you after statutory levies, service charges and taxes, while keeping transaction costs separate from any later capital-gains calculation.
Frequently Asked Questions
Can STT be avoided by changing brokers?
No. STT is a statutory levy tied to the qualifying transaction, not a discretionary broker fee. Changing brokers may change brokerage or DP pricing, but it does not remove STT that applies under the relevant schedule.
Why can two brokers show different totals for the same trade?
Their brokerage basis, minimums, per-order rules, exchange pass-through treatment or DP fees may differ. The statutory lines should still follow the applicable instrument, side and effective-date rules, so compare itemised contract notes rather than only the final debit.
Is an option exercised treated like an option sold for STT?
Not necessarily. The NSE schedule has a separate exercise row, and its sale-of-option rate is based on premium. Check the current schedule for the exact exercise treatment and date instead of reusing the sale rate.
Where can I find the charges my broker is allowed to levy?
Start with the tariff sheet supplied when your account was opened and any updated version in your account portal. SEBI requires brokers to provide a tariff sheet; the contract note then shows what was actually charged on a particular execution.
