Guide · Costs and taxes · Updated 2026-07-05

The real cost of a trade in India: the full stack, worked to the paisa

Most beginners think the cost of a trade is the brokerage, so they choose a broker on brokerage alone. That is the wrong optimisation. Brokerage is one line among seven, and under the flat-fee discount models that now dominate Indian retail, it is often the smallest non-trivial one. The rest of the stack is statutory: STT, exchange charges, stamp duty, the SEBI fee, GST, and the depository charge are set by the government, the exchanges and the depositories, and they are identical no matter who executes the trade. This guide decomposes each charge with its current basis, then works the same notional through delivery, intraday and F&O to the paisa, so you can see exactly where each rupee goes. Rates change, so treat every figure as current as of 2026, verify against the live rulebook, and read every worked rupee as illustrative.

The seven charges, and what each one really is

Each line has its own rate, its own base, and its own rule for which side and which segment it applies to. The interaction is what makes a contract note read like a tax exercise. Take them one at a time.

1. Brokerage. The broker's fee for executing an order. Two models dominate. A flat-per-order model charges a fixed amount for each executed order irrespective of size, so a large order pays the same as a small one, which is why it suits active and derivatives trading. A percentage-of-turnover model charges a fraction of the traded value, often with a floor and a cap, which scales with trade size and is the traditional full-service pattern. Several houses now charge nothing on delivery and monetise elsewhere. Whatever the model, brokerage is the only negotiable line. Everything below it is fixed by statute.

2. Securities Transaction Tax (STT). A central levy on securities transactions, and the line that most distinguishes Indian trading costs from other markets. It is deliberately asymmetric by segment and side. On delivery equity it falls on both the buy and the sell side. On intraday equity it falls on the sell side only, at a lower rate. On equity futures it falls on the sell side. On equity options it falls on the sell side, charged on the premium when the option is sold or squared off, and on the intrinsic value when an in-the-money option is exercised, which can produce a far larger STT bill than the holder expected. The derivatives rates were raised on 1 October 2024 and raised again on 1 April 2026, covered in detail below.

3. Exchange transaction charges. The NSE and the BSE each bill a charge on turnover for the use of their order-matching systems, published per segment and applied on both sides of the trade. In percentage terms the cash-equity charge is a small fraction of turnover, but on options it is levied on the premium at a much higher rate, which makes it one of the larger lines on an options contract note.

4. GST at 18 percent. Goods and Services Tax at 18 percent applies to the service lines only: brokerage plus exchange transaction charges plus the SEBI turnover fee, and any DP charge. It does not apply to STT or stamp duty, because those are themselves taxes, not services. This is why a zero-brokerage delivery trade still carries GST: the exchange charge, the SEBI fee and the DP charge remain a taxable base.

5. The SEBI turnover fee. A regulatory levy the market regulator charges on turnover, at 0.0001 percent, which is 10 rupees per crore, on both sides. It is trivial on any single trade but it is always present, and it forms part of the GST base.

6. Stamp duty. A charge on the transfer of securities, paid by the buyer only. Since 1 July 2020 it has been uniform across every Indian state, collected centrally through the exchange or depository rather than state by state, ending an old patchwork of state-specific rates. It applies on the buy side across delivery, intraday, futures and options at segment-specific rates.

7. DP charges. A flat fee the depository participant charges when securities leave your demat account, that is, on the sell side of a delivery trade only. It is charged once per scrip per day regardless of quantity, and never on a purchase or on an intraday trade that does not settle to delivery. Because it is a flat rupee amount plus 18 percent GST, it weighs most on small delivery sells, where it can match or beat the brokerage.

The full charge schedule as of 2026

The table below is the complete stack with its current basis. Verify each figure against the live SEBI rulebook, the exchange circulars and your depository schedule before relying on it, because these rates are revised periodically, the derivatives STT most recently on 1 April 2026.

The scoop: STT on derivatives was raised twice in eighteen months

The single most out-of-date fact on most live cost articles is the derivatives STT rate, because it moved twice in quick succession. The Finance (No. 2) Act 2024 raised STT on futures from 0.0125 to 0.02 percent and on option premium from 0.0625 to 0.1 percent, effective 1 October 2024. Then the Finance Act 2026 raised them again, to 0.05 percent on futures and 0.15 percent on option premium, effective 1 April 2026. Options exercise STT was aligned to 0.15 percent at the same time.

The direction is deliberate. STT on derivatives falls on the sell side and scales with turnover, so raising it targets exactly the high-turnover, high-frequency derivatives activity the regulator has repeatedly flagged as harmful to retail participants. For a style that squares off many contracts a day, a rate that rose from 0.0125 to 0.05 percent on futures, a fourfold increase across the two revisions, is a material change in the cost of doing business. Any source that still quotes the pre-October-2024 numbers is wrong on the one line that has moved most.

Where each rupee goes: one delivery trade, decomposed

Take a delivery round trip, a 1,00,000 rupee buy and a 1,00,000 rupee sell, with an illustrative flat brokerage of 20 rupees per order. The total cost is about 286 rupees, and the figure below shows how that total splits across the seven lines. Notice how little of it is brokerage.

The same notional, three ways: delivery, intraday and F&O

Here is the part that surprises people. Run the identical 1,00,000 rupee per leg round trip through three segments and the totals diverge sharply, and not in the direction most expect. Intraday equity is the cheapest of the three, because its STT is 0.025 percent on one side only and it carries no DP charge. Delivery is the dearest, because STT is 0.1 percent on both sides and a DP charge lands on the sell. Options sit close behind delivery, driven by the 0.15 percent sell-side STT on premium and the heavy exchange charge on premium.

The comparison below draws the three totals to scale. The lesson is that the segment, not the broker, is the first-order determinant of what a trade costs. A trader who assumes options are always the priciest, or that delivery is always the cheapest because it is patient, has the ranking backwards for a single round trip of equal size.

The frequency cost-wall: why churning is a losing game

Here is the mechanism that turns a small per-trade cost into a decisive one. Every charge in the stack is levied per trade and is independent of whether the trade wins or loses. Costs do not scale with skill or with edge. They scale with one thing: the number of trades. A patient investor pays the stack a handful of times a year. A high-frequency intraday style pays it hundreds or thousands of times, and the drag compounds against a fixed capital base.

Deploy 1,00,000 rupees fully on each intraday equity round trip. The cost per round trip is about 83 rupees, roughly 0.08 percent of capital. That sounds negligible. Now multiply by frequency. At 250 round trips a year the cost is about 20,670 rupees, roughly 21 percent of the capital. At 1,000 round trips it is about 82,681 rupees, roughly 83 percent. The chart below is the wall.

This is why the cost stack is not a footnote. A market is roughly zero-sum before costs, a rupee won by one participant is a rupee lost by another, and strictly negative-sum once the stack is subtracted, because the charges leave the pool of participants regardless of who was right. Frequency is the multiplier that converts a barely-perceptible per-trade cost into a structural headwind. This drag is one reason SEBI's FY25 study, published in July 2025, found that 91 percent of individual equity-derivatives traders lost money, with aggregate net losses of 1,05,603 crore rupees. Understanding what a trade truly costs before you place it is exactly the upstream judgement that the method we teach is built around.

The break-even move: the true starting line of a trade

Because you pay the stack on both entry and exit, a trade does not start at zero. It starts in a hole equal to the round-trip cost, and the price has to move far enough just to climb out before a single rupee of profit exists. That distance is the break-even move, and it is the honest starting line every trade begins behind.

For the intraday equity round trip, the break-even move is the total cost expressed as a percentage of the notional. It shrinks as the trade grows, because the flat brokerage is spread over a larger base while the percentage-based charges stay proportional. The table quantifies it.

Read this the right way. On a 25,000 rupee intraday trade, the price has to rise about 0.22 percent before you are even, and a scalper aiming for a few basis points of edge is fighting the cost stack as much as the market. Options carry a larger break-even hurdle again, because of the 0.15 percent sell-side STT on premium and the heavy exchange charge, so a small options premium has to move a larger fraction of itself to clear costs. The break-even move is the number to compute before entering, not after: it tells you whether your intended edge even clears the toll before you have taken any market risk.

What this means for how you trade

Three conclusions follow directly from the arithmetic, and none of them depend on any forecast. First, choose the segment deliberately, because it is the first-order driver of cost: an equal-size round trip costs roughly three and a half times as much in delivery or options as in intraday equity, and the ranking is not the one intuition suggests. Second, choose frequency deliberately, because it is the multiplier that turns a small per-trade toll into a structural drag on capital. Third, always compute the break-even move before entering, so you know whether your intended edge clears the toll before you take on market risk at all.

For a related decision on how the horizon changes the trade-off between these costs and the taxes on the gains, see intraday versus delivery trading. For the tax treatment of the profits themselves once you have cleared these costs, see how F&O profits are taxed in India. And for the way these costs bite hardest on the highest-turnover index styles, see the note on Nifty and Bank Nifty intraday strategies. Cost is not the exciting part of trading, but it is the part that is certain, and the part you control by the segment you choose and the frequency you accept.