Brokerage Calculations India
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Intra day - Intraday Trading, also known as Day Trading means you buy a stock and sell that position before the end of that day’s trading session thereby making a profit or loss for you. A buy position and a sell position of same number of shares of a company – All in one day’s trading session. Thus, intraday means trading in a day. In intra day trading, brokerage is low in comparison to the delivery. Delivery- You do not square off your position in a day session. Instead, you decide to hold the shares till the next trading session or till 20 years or till your target is reached. Now let’s talk about what those charges are. Since the topic is about brokerage , i have also mentioned about the brokerages on derivatives transaction. RATES OF BROKERAGE The net trading cost is computed as below: Trading cost = Brokerage + STT + Stamp duty + other charges Now lets try to separate all the cost componentsBrokerage: It is calculated at the agreed percentage, on the total cost of shares bought or sold. If you are charged .03% for intraday and .30% on delivery, the basic brokerage figure would be as followsMarket price of the share x number of shares x .03% (intra day) Market price of the share x number of shares x .30% (delivery) Securities transaction tax- It is imposed on the sale/purchase of securities by investors and is charged on total turnover. It is charged as follows: Equity Delivery Transactions Purchase: 0.125% of Turnover i.e. (Number of Shares * Price) Sell: 0.125% of Turnover i.e. (Number of Shares * Price) Equity Intra-day Transactions Purchase: NIL Sell: 0.025% of Turnover i.e. (Number of Shares * Price) Future Transactions Purchase: NIL Sell: 0.017% of Turnover i.e. (Number of Lots * Lot Size * Price) Option Transactions Purchase: NIL at the time of purchase of option. However the purchaser has to pay 0.125% of the Settlement Price i.e. (Number of Lots * Lot Size * Strike Price), in case of option exercise Sell: 0.017% of Premium Transaction charges: There is a very slight difference in the rate of transaction charges for NSE and the BSE. Equity Delivery Transactions Purchase: 0.0035% of turnover in NSE and 0.0034% of Turnover in BSE Sell: 0.0035% of turnover in NSE and 0.0034% of Turnover in BSE
Equity Intra-day Transactions Purchase: 0.0035% of Turnover in NSE and 0.0034% of Turnover in BSE Sell: 0.0035% of Turnover in NSE and 0.0034% of Turnover in BSE Future Transactions Purchase: 0.002% of Turnover i.e. (Number of Lots * Lot Size * Price) Sell: 0.002% of Turnover i.e. (Number of Lots * Lot Size * Price) Option Transactions Purchase: 0.05% of Premium Sell: 0.05% of Premium SEBI turnover charges: For equity transaction, this remains NIL but for derivative transactions, it is charged @ 0.0002% of total turnover. The calculation would be as follows. Equity Delivery Transactions Purchase: NIL Sell: NIL Equity Intra-day Transactions Purchase: NIL Sell: NIL Future Transactions Purchase: 0.0002% of Turnover i.e. (Number of Lots * Lot Size * Price) Sell: 0.0002% of Turnover i.e. (Number of Lots * Lot Size * Price) Option Transactions Purchase: 0.0002% of Premium Sell: 0.0002% of Notional Value in case of exercise or assignment Stamp Duty Equity Delivery Transactions Purchase: 0.01% of Turnover. Turnover usually taken in multiple of Rs 5000 Sell: 0.01% of Turnover. Turnover usually taken in multiple of Rs 5000 Equity Intra-day Transactions Purchase: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Sell: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Future Transactions Purchase: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Sell: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Option Transactions Purchase: 0.002% of Premium Sell: 0.002% of Notional Value in case of exercise or assignment Service Tax Service Tax, Surcharge and Education Cess are applicable only on Brokerage. No Service Tax, Surcharge and Education Cess are not applicable on Securities Transaction Tax (STT) etc..Service tax is levied at 10.30%. EXAMPLE:
Now let’s assume that you purchased 10 ICICI bank’s share at Rs 868.00 through NSE. Assuming that the brokerage charged is .05% for intra day and .50% for delivery, the total cost of the share (for delivery) would be calculated as follows: Basic brokerage: Rs 868 x .50% = Rs 4.34 Security transaction charge = 868 x 10 x 0.125% =Rs 11 Transaction charge = Rs 0.32 SEBI turnover charges = NIL Stamp duty = Rs 0.87 Service tax = 4.47 Total cost of 10 shares @ 868 = Rs 8740.06 When you buy shares, these figures will appear on your digital contract note sent to you via mail. It’s important to keep a print out of those digital contract notes in a file. Brokerages are very important costs associated with stocks and you cannot afford to ignore it. You have to be vigilant on the amount you are paying. Periodic check of your ledger account is necessary. The brokerage affects investors in different ways. For infrequent traders, a higher brokerage would lengthen the amount of time required to break even. If you are a high volume trader, a large brokerage will eat into their overall return. Now, hope you’ve understood the cost structure involved with stock transactions in India.
Intra day - Intraday Trading, also known as Day Trading means you buy a stock and sell that position before the end of that day’s trading session thereby making a profit or loss for you. A buy position and a sell position of same number of shares of a company – All in one day’s trading session. Thus, intraday means trading in a day. In intra day trading, brokerage is low in comparison to the delivery. Delivery- You do not square off your position in a day session. Instead, you decide to hold the shares till the next trading session or till 20 years or till your target is reached. Now let’s talk about what those charges are. Since the topic is about brokerage , i have also mentioned about the brokerages on derivatives transaction. RATES OF BROKERAGE The net trading cost is computed as below: Trading cost = Brokerage + STT + Stamp duty + other charges Now lets try to separate all the cost componentsBrokerage: It is calculated at the agreed percentage, on the total cost of shares bought or sold. If you are charged .03% for intraday and .30% on delivery, the basic brokerage figure would be as followsMarket price of the share x number of shares x .03% (intra day) Market price of the share x number of shares x .30% (delivery) Securities transaction tax- It is imposed on the sale/purchase of securities by investors and is charged on total turnover. It is charged as follows: Equity Delivery Transactions Purchase: 0.125% of Turnover i.e. (Number of Shares * Price) Sell: 0.125% of Turnover i.e. (Number of Shares * Price) Equity Intra-day Transactions Purchase: NIL Sell: 0.025% of Turnover i.e. (Number of Shares * Price) Future Transactions Purchase: NIL Sell: 0.017% of Turnover i.e. (Number of Lots * Lot Size * Price) Option Transactions Purchase: NIL at the time of purchase of option. However the purchaser has to pay 0.125% of the Settlement Price i.e. (Number of Lots * Lot Size * Strike Price), in case of option exercise Sell: 0.017% of Premium Transaction charges: There is a very slight difference in the rate of transaction charges for NSE and the BSE. Equity Delivery Transactions Purchase: 0.0035% of turnover in NSE and 0.0034% of Turnover in BSE Sell: 0.0035% of turnover in NSE and 0.0034% of Turnover in BSE
Equity Intra-day Transactions Purchase: 0.0035% of Turnover in NSE and 0.0034% of Turnover in BSE Sell: 0.0035% of Turnover in NSE and 0.0034% of Turnover in BSE Future Transactions Purchase: 0.002% of Turnover i.e. (Number of Lots * Lot Size * Price) Sell: 0.002% of Turnover i.e. (Number of Lots * Lot Size * Price) Option Transactions Purchase: 0.05% of Premium Sell: 0.05% of Premium SEBI turnover charges: For equity transaction, this remains NIL but for derivative transactions, it is charged @ 0.0002% of total turnover. The calculation would be as follows. Equity Delivery Transactions Purchase: NIL Sell: NIL Equity Intra-day Transactions Purchase: NIL Sell: NIL Future Transactions Purchase: 0.0002% of Turnover i.e. (Number of Lots * Lot Size * Price) Sell: 0.0002% of Turnover i.e. (Number of Lots * Lot Size * Price) Option Transactions Purchase: 0.0002% of Premium Sell: 0.0002% of Notional Value in case of exercise or assignment Stamp Duty Equity Delivery Transactions Purchase: 0.01% of Turnover. Turnover usually taken in multiple of Rs 5000 Sell: 0.01% of Turnover. Turnover usually taken in multiple of Rs 5000 Equity Intra-day Transactions Purchase: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Sell: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Future Transactions Purchase: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Sell: 0.002% of Turnover. Turnover usually taken in multiple of Rs 5000 Option Transactions Purchase: 0.002% of Premium Sell: 0.002% of Notional Value in case of exercise or assignment Service Tax Service Tax, Surcharge and Education Cess are applicable only on Brokerage. No Service Tax, Surcharge and Education Cess are not applicable on Securities Transaction Tax (STT) etc..Service tax is levied at 10.30%. EXAMPLE:
Now let’s assume that you purchased 10 ICICI bank’s share at Rs 868.00 through NSE. Assuming that the brokerage charged is .05% for intra day and .50% for delivery, the total cost of the share (for delivery) would be calculated as follows: Basic brokerage: Rs 868 x .50% = Rs 4.34 Security transaction charge = 868 x 10 x 0.125% =Rs 11 Transaction charge = Rs 0.32 SEBI turnover charges = NIL Stamp duty = Rs 0.87 Service tax = 4.47 Total cost of 10 shares @ 868 = Rs 8740.06 When you buy shares, these figures will appear on your digital contract note sent to you via mail. It’s important to keep a print out of those digital contract notes in a file. Brokerages are very important costs associated with stocks and you cannot afford to ignore it. You have to be vigilant on the amount you are paying. Periodic check of your ledger account is necessary. The brokerage affects investors in different ways. For infrequent traders, a higher brokerage would lengthen the amount of time required to break even. If you are a high volume trader, a large brokerage will eat into their overall return. Now, hope you’ve understood the cost structure involved with stock transactions in India.
