2026-05-29 · Stage 1 · Keyword: STT stamp duty trade cost India

Brokerage, STT, Stamp Duty, GST: What an Indian Trade Really Costs in 2026

Brokerage is the smallest line on your contract note. Here is the full transaction-cost stack — STT, stamp duty, GST, exchange charges, SEBI fee — with worked examples.

Open a recent contract note from any Indian broker and the line items add up to more than most retail traders expect. Brokerage — the line most beginners think of as "the cost of trading" — is frequently the smallest non-trivial entry. Securities Transaction Tax, exchange transaction charges, stamp duty, GST on services, and the SEBI turnover fee all stack on top, and on certain strategy types the non-brokerage cost stack is multiples of the brokerage itself.

This article walks through every line, what each one is, what rate applies, and what base the rate applies to. We end with two worked examples — a cash-delivery trade and an intraday F&O trade — so the proportional weight of each line is visible at a glance.

A note on rates: the specific rates change from time to time via SEBI circulars, Union Budget changes, and exchange-level revisions. The figures in this article reflect the general framework as of 2026; the precise rates in any specific window should be verified against the current SEBI master rulebook, the exchange circulars, and the broker's published charge schedule.

The six lines on every Indian contract note

Every Indian equity-market contract note contains the same six categories of cost (occasionally consolidated into fewer line items by certain brokers, but the underlying components are the same):

1. Brokerage. What your broker charges for executing the trade.
2. Securities Transaction Tax (STT). A central-government tax on securities transactions, varying by segment and direction.
3. Stamp duty. A state-level (now unified) duty on transfer of securities.
4. Exchange transaction charges. What the exchange charges for the use of its order-matching system.
5. SEBI turnover fee. A small regulatory fee imposed by SEBI on every transaction.
6. GST (Goods and Services Tax). Applied at 18% on a defined sub-set of the above components.

Each has its own rate, its own base, and its own rule for when it applies. The interaction between them is what makes the contract note read like a tax-code exercise.

Securities Transaction Tax: rates by segment

STT is the largest non-brokerage line on most retail contract notes and is the cost item that most fundamentally distinguishes Indian taxation of trading from systems elsewhere.

The rates vary by segment and by trade direction:

Cash delivery (equity shares held into demat). STT is levied on both the buy side and the sell side. The rate is applied to the trade value (price × quantity). The buy-side and sell-side rates are equal under current rules.

Cash intraday (equity shares squared off the same day). STT is levied on the sell side only. The rate is lower than the delivery rate. This asymmetry — buyers pay STT on delivery but not on intraday — is one of the structural features of the Indian framework.

Equity futures. STT is levied on the sell side, applied to the contract value.

Equity options. STT is levied on the sell side. The base depends on whether the option is exercised or sold/squared off — exercised options are taxed on intrinsic value, while sold/squared options are taxed on the premium. This is a structurally important distinction because the STT on physical-settled exercised options can be materially larger than the STT on premium-based sold options, and the difference can produce surprising contract-note totals for the inattentive holder.

The general principle to internalise: STT is segment-and-direction-specific. The same trade size produces different STT bills depending on which segment and which side of the trade.

For active traders, STT can be the largest single line item on the contract note — frequently exceeding brokerage by a wide margin in cash delivery and in options writing.

Stamp duty: the post-2020 unified regime

Stamp duty was historically a state-level duty, with different rates in different states and a procedural complexity that imposed administrative cost on every transaction. The post-July 2020 unification consolidated stamp duty into a single set of rates applied uniformly across India and levied at the exchange level.

The current structure:

• Cash delivery. A flat percentage applied to the buy-side trade value. Sellers do not pay stamp duty on the sale.
• Cash intraday. A different (and lower) percentage on the buy side.
• Futures. A percentage applied to the buy-side notional value.
• Options. A percentage applied to the buy-side premium.

Stamp duty is buy-side-only across all segments — the asymmetric opposite of STT's sell-side-heavy structure. This means that a pure-buying activity (cash delivery accumulation) sees more stamp duty than STT, while pure-selling activity (options writing) sees more STT than stamp duty. A round-trip trade pays both.

The unified regime simplified the contract note significantly — pre-2020 contract notes had to itemise state-specific stamp duty, and the move to a unified percentage removed an entire category of operational complexity.

GST: when 18% applies and on what base

GST is the third large non-brokerage component for most retail trades. Two things are important to understand.

The rate. 18% GST applies to a defined set of components on the contract note. Critically, GST does not apply to STT or stamp duty — those are themselves taxes and not subject to additional GST.

The base. GST applies to brokerage plus exchange transaction charges plus the SEBI turnover fee. Three components, summed, then multiplied by 18%. A broker who charges low brokerage but quotes their GST inclusively in a different way may have a slightly different presentation, but the underlying base is fixed by the GST framework.

The 18% rate on a small base sounds harmless until the trader realises that for an active trader, the brokerage line itself is small but the GST line scales with brokerage + exchange charges + SEBI fee, and the cumulative GST across many trades adds up.

Exchange transaction charges + SEBI turnover fee

These are the smaller line items but they are reliably present on every trade.

Exchange transaction charges. Each exchange (NSE and BSE) publishes its transaction-charge schedule, broken down by segment (cash, F&O, currency, commodities) and by member type. The rates are small in percentage terms but apply per side, per trade, and add up over an active trading session.

SEBI turnover fee. A very small percentage levied by SEBI on every transaction, irrespective of segment. The rate is essentially trivial on any individual trade but is part of the cost stack and visible on every contract note.

For the retail reader, the practical implication is that there is no such thing as a "zero-cost trade" in the Indian framework. Even on a so-called zero-brokerage delivery trade, STT, stamp duty, exchange charges, GST on the non-STT/non-stamp components, and the SEBI fee remain. The trade has a non-zero cost regardless of the broker's brokerage policy.

Brokerage models: flat fee, percentage, zero-brokerage delivery

Indian retail brokerage models have converged broadly into a small set of patterns.

Flat fee. A flat amount per executed order, regardless of trade size. Common for intraday and F&O. The flat-fee model rewards size — a large trade pays the same brokerage as a small one.

Percentage of trade value. A percentage of trade value, sometimes with a minimum and maximum cap. Common for cash delivery in traditional full-service brokerage. The percentage model scales with trade size.

Zero-brokerage delivery. A model offered by several discount brokers in which cash-delivery trades incur no brokerage (the broker monetises through other lines — F&O brokerage, margin funding, ancillary services). The non-brokerage cost stack (STT, stamp duty, exchange charges, GST, SEBI fee) is still present.

A trader evaluating broker cost should compare across the full stack, not just brokerage. Two brokers with very different brokerage rates can produce very similar total cost outcomes once STT, stamp duty, GST, and exchange charges are added; and conversely two brokers with similar brokerage can produce different totals depending on how they structure the ancillary lines.

Two worked examples

Example one — cash delivery purchase. Suppose a retail investor buys ₹1,00,000 worth of a Nifty 50 large-cap for delivery and sells it three months later for ₹1,10,000. The cost stack:

• Brokerage (buy and sell) — depends on broker; on a zero-brokerage-delivery broker this is ₹0, on a percentage-based broker this might be in the low hundreds.
• STT on buy and sell — the largest non-brokerage component, applied to both sides on cash delivery.
• Stamp duty on buy side only — a small absolute amount on the buy trade value.
• Exchange charges on both sides — small.
• GST at 18% on brokerage + exchange charges + SEBI fee — small if brokerage is zero, somewhat larger if brokerage applies.
• SEBI turnover fee — trivial absolute amount.

The proportional reading: for a delivery investor, STT is typically the dominant line by a wide margin, followed by stamp duty. Brokerage and GST are the smallest components.

Example two — intraday F&O trade. Suppose a trader buys and sells one lot of Nifty index options the same day, with a buy premium and a sell premium each in the four-figure range and a small profit between them.

• Brokerage — typically a small flat fee per side under most discount-broker models.
• STT on sell side only — applied to the premium value.
• Stamp duty on buy side only — applied to the premium value.
• Exchange charges on both sides — small per side but two sides accumulate.
• GST at 18% on brokerage + exchange charges + SEBI fee — small absolute amount, scaling with broker cost.
• SEBI turnover fee — trivial.

For a small intraday options trade with a small profit, the combined cost stack can be a meaningful proportion of the gross profit. A trader who does not subtract the full cost stack from their displayed P&L is operating on an inflated view of their actual returns.

The strategic implication

The cost stack matters because it changes which strategies are viable.

A high-frequency intraday options-buying strategy with small per-trade edge sees the cost stack consume a disproportionate fraction of the gross expected value. Even a strategy with positive gross edge can have negative net-of-cost edge after the full stack is computed. Traders who run such strategies on gross-P&L assumptions are building positions on numbers that do not survive the contract note.

A multi-month delivery strategy with substantial per-trade edge sees the cost stack consume a small fraction of the gross expected value. The same strategy is viable at much smaller per-trade edges than the intraday strategy because the cost-to-edge ratio is much more favourable.

The discipline: when evaluating any strategy idea, run the cost stack first and compute net-of-cost expected value. A strategy that looks attractive on gross numbers may be unviable on net numbers. The contract note is the truth.

Continue reading. For tax treatment of F&O profits, see our F&O taxation in India article. For capital-gains tax on equity holdings, see our STCG and LTCG for the active trader piece. For the account stack the trades flow through, see our demat vs trading account article.

Lead magnet. Download the free Indian Contract Note Decoder (line-by-line) PDF. Email-gated.

Bharath Shiksha is an educational platform. We are not a SEBI-registered investment adviser or research analyst. Nothing on this page is a recommendation to buy, sell, or hold any security. Past data is illustrative only. For educational purposes only — not investment advice.