When you trade in the market there is a cost in the form of brokerage to the broker and other costs. While brokerage compensates the broker for the services, there are also other statutory charges that are imposed on the client. Here is a list of other charges that are imposed on the customer in addition to the brokerage charge.
  • Brokerage (at the agreed rate as per your Client-broker agreement)
  • Security Transaction Tax (at the rate of 0.1% of the turnover)
  • Transaction Charges (0.00325% of the turnover in case of NSE; it is a fixed cost for BSE)
  • Goods & Services Tax (GST) at 18%
  • Health & Education Cess at 4% of GST
  • SEBI Charges at Rs.20 per crore of the transaction which is payable to SEBI
On the same day, the broker generates a ‘contract note’ and sends a copy of the same to the client who executes the trade. A contract note is like a bill generated detailing every transaction you made. This is an important document to be saved for future reference. A contract note typically shows a break up of all transactions done during the day along with the trade reference number. It also shows the breakup of charges charged by the broker.