CHAPTER 5 : Brokerage Fundamentals

Every Trader/ Investor has to pay a brokerage for every trade entered via the Trading terminal whether online or offline.

Intraday Brokerage - 0.03% for buying and 0.03% on selling, plus taxes.

Delivery Brokerage - 0.30% for buying and 0.30% for selling, plus taxes.

Although the maximum brokerage which can be charged, according to SEBI should not be more than 2.5% of the trading volume.

Brokerage is levied on the total transaction value. Ex: A trader has bought 1000 shares @100 and sold them @105 in intraday, the brokerage calculation would be

• Buying Brokerage = (1000 *100) * 0.03% = Rs. 30
• Selling Brokerage = (1000 * 105) * 0.03% = 31.50

Various brokerage firms charge brokerage in different ways. Some firms charge on total turn-over (buying and selling), some charge a fixed amount per lot whereas some others charge a fixed amount per month irrespective of number of trades or turn-over. Based on the brokerage charging method and available margin, customer can select the brokerage firm. DreamGains customer support team can assist you with finding the right broker for you and providing advice on short-term/ long-term positions. Just follow the link for more information.

Brokerage and Tax Calculation - Intraday

Buy Side

• Brokerage: 0.01 % to 0.03% (Charged on order amount). It is a broker's income.
• Service Tax: 12.36 % (Charged on brokerage). It is excise department's income.
• NSE / BSE turn over charges: 0.003% (Charged on order amount). It is exchange's income.
• Stamp duty / Notary Tax: 0.002 % (Charged on order amount). It is State Government's income.

Sell Side

• Brokerage: 0.01 % to 0.03% (Charged on order amount). It is broker's income.
• Service Tax: 12.36 % (Charged on brokerage). It is excise department's income.
• NSE / BSE turn over charges: 0.003% (Charged on order amount). It is exchange's income.
• Stamp duty / Notary Tax: 0.002 % (Charged on order amount). It is State Government's income.
• STT Security Transition Tax: 0.0125% (Charged on order amount). It is Central Government's income.

If a client has bought 1000 shares at Rs. 100, then the calculation of charges would be done as follows:

Buy Side

• Brokerage: 30 (0.03 paise brokerage)
• Service Tax: 3.7
• NSE / BSE turn over charges: 3
• Stamp duty / Notary Tax: 2
• Total Amount: 38.70

If the client has now booked profit at 103, the calculation of charges would be done as follows:

Sell Side

• Brokerage: 30.90
• Service Tax: 3.82
• NSE / BSE turn over charges: 3.09
• Stamp duty / Notary Tax: 2.06
• STT Security Transition Tax: 12.88
• Total Amount: 52.75

Total Charges = Buy + Sell = Rs. 38.70 + Rs. 52.75 = Rs. 91.45

Brokerage and Tax Calculation - Delivery

Buy Side

• Brokerage: 0.3% (Charged on order amount). It is broker's income.
• Service Tax: 12.36 % (Charged on brokerage). It is excise department's income.
• NSE / BSE turn over charges: 0.003% (Charged on order amount). It is exchange's income.
• Stamp duty / Notary Tax: 0.002 % (Charged on order amount). It is State Government's income.

Sell Side

• Brokerage: 0.3% (Charged on order amount). It is broker's income.
• Service Tax: 12.36 % (Charged on brokerage).It is excise department's income. 
• NSE / BSE turn over charges: 0.003% (Charged on order amount). It is exchange's income.
• Stamp duty / Notary Tax: 0.002 % (Charged on order amount). It is State Government's income.
• STT Security Transition Tax: 0.0100% (Charged on order amount). It is Central Government's income.
• DP Charge: Rs. 18 to 20/- per script, whether the client sell 1 share or 100 shares as it is the charge to close/ Sell Off a particular trade.

If a client has bought 1000 shares at Rs. 100, the calculation of charges would be done as follows:

Buy Side

• Brokerage: 300 (0.30 paise brokerage)
• Service Tax: 37.08
• NSE / BSE turn over charges: 3
• Stamp duty / Notary Tax: 2
• Total Amount: 342.08

If the client has now booked profit at 105, the calculation of charges would be done as follows:

Sell Side

• Brokerage: 315
• Service Tax: 38.93
• NSE / BSE turn over charges: 3.15
• Stamp duty / Notary Tax: 2.10
• STT Security Transition Tax: 10.50
• Total Amount: 369.68 (DP Charge excluded)

Total Charges = Buy + Sell = 342.08 + 369.68 = 711.76

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